There was a definite buzz of entrepreneurial spirit in Suffolk with the first of a series of Start-Up Masterclass, at which successful entrepreneurs offer advice on various topics to attendees, usually those who are involved in early stage businesses.
On the panel at the event on October 3, 2011, were:
After an introduction by facilitator Mauro Ciaccio, Jamie Riddell started proceedings by explaining a little about his background. Riddell explained that he and his wife and business partner, Katherine Riddell
, had set up their own business in 1999 because they believed that there was a niche for an effective digital marketing agency in the Eastern region. The pair believed that they could bring "a solid proposition and a point of difference" to the market. The company, Cheeze Ltd (now 20:20
), was started in a back bedroom and went on to become one of the most prominent digital agencies in East Anglia.
In those early days, Riddell related, there wasn't much competition. "One of the important things that we did," he says, "is that I didn't resign from my existing job until we had the first contract signed so that when we started, we had business and we had cash-flow, which was important because it gave the business some income."
We didn't do anything without a contract, we didn't do anything without a written approval, and any conversations, any disagreements, were all in writing...
The company's base in Suffolk was at first something of an obstacle to trading, Riddell says, because few people outside of the county knew its location. Also, one of the many questions he was asked was: "How are you going to get up in the mornings?". The reply was always the same, Riddell says: "If I don't, I don't get paid!"
The business grew out of the couple's home until they took office space in nearby Ipswich. However, in retrospect he admits that they didn't invest heavily enough in the brand at the time. "Branding, marketing - with hindsight are things that we could have done better because they would have helped us grow the brand and credibility quicker."
Business for Cheeze Ltd grew by word of mouth and it eventually grew to being 30-plus people with a turnover in excess of £12 million, with offices in Ipswich, London, and Leeds. The biggest success of the business, says Riddell, was the generation of cash flow, and incentivisation of cash flow has become something of a Holy Grail for the Riddells and this paid dividend in the early years, allowing them to do the things they wanted to do and to grow the business.
There were also challenges, despite overcoming the credibility issues. "Clients not wanting to work with us, not wanting to pay us, wanting to sue us but what held us in good stead was paperwork. Katherine is a stickler for paperwork; we didn't do anything without a contract, we didn't do anything without a written approval, and any conversations, any disagreements, were all in writing, which meant that we had a very strong safety net for the business to ensure that we were safe and protected when we needed to be."
Simon Grice is a charismatic character who epitomises the over-used phrase "serial entrepreneur". His career started in 1991 when he worked at CERN
in Geneva with members of the team who built the first web servers and browsers. Since then he has gone on to found or co-found PersonalMail (Europe's first web-based emailed company), Netpoll, etribes and, more recently, Midentity. He is currently founder of www.ideas.org, with another project, www.Belocal.com, due to come on-stream in the near future.
What I learned to do was not chase people who didn't want something but instead to put a lot of energy into those who did.
Grice remembers the first time that a web server outside of the CERN hub was connected - effectively the birth of the internet. After a brief visit to India, he re-joined CERN where he witnessed the birth of the internet.
In 1994, Grice set up a company called Business Connections, however, it wasn't until 1995 that businesses began to see the potential of the internet and the commissions to build websites began.
It was a turning point for Simon Grice who says: "What I learned to do was not chase people who didn't want something but instead to put a lot of energy into those who did."
Since then, Grice has set up a range of businesses, mainly in the digital sector. He advises: "Focus on who your actual target customer is and what's the benefit that you're actually bringing them. Identify a gap in the market and offer a service to that emerging need."
He continues: "A lot of entrepreneurs, when they start up, focus on what they believe the market should have, rather than what the market needs or wants."
Grice concluded by suggesting that a lot of would be entrepreneurs worry about their early-stage businesses failing. He suggests that, while it would be foolish to attempt to start a business without appropriate research and funding, the attempt has to be made.
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Oxem's Kevin Gooding is not afraid to admit that his first business, launched in 2001, suffered from a lack of forward planning and a certain delusion of grandeur. A full-time finance director was appointed, which Gooding now admits was an error of judgement.
You have to get out there and sell something. Only when you've got the cash coming in you can start to be a little more imaginative about what you really want to do.
Gooding stumbled into entrepreneurship almost by accident. He provided a mobile phone app for O2, who were at the time sponsoring the TV reality show Big Brother.
"On the back of that, I managed to raise about a third of a million from an angel investor and from that I started making some real mistakes. I started building a team, paying lots of salaries and, six months later, I'd spent most of the money and I suddenly realised that this was going nowhere. I hadn't actually got any further down the line. That was a very big learning curve."
He continues: “I still had in the back of my mind a corporate mentality - build a nice big team - which just didn't work. You have to get out there and sell something. Only when you've got the cash coming in you can start to be a little more imaginative about what you really want to do."
Gooding is far more realistic these days. "Understand what the obstacles are before you meet them," he advises.
Harry Berry is a veteran of Venture Capitalism (VC). With 30 years experience in the telecoms industry, he has held a wide range of senior positions. He was a Director on the Board of BT Exact Technologies and the creator of BT Brightstar in the late 1990s, BT's corporate incubator prior to setting up the European arm of New Venture Partners
. Berry is a Board member of several software and services businesses, including Subex
Inc., and Real Time Content
He advises that anyone moving into the business incubator
market develops the talent of premonition. When the tech market crashed in 2000, Berry was faced with a stark choice, having been caught in the crossfire running 11 incubator projects. Five of these survived the crisis, and were subsequently transferred out of the BT stable to the control of an American company in 2003. The organisation became New Venture Partners, of which Berry is currently Managing Partner.
It's always amazing to me that people don't realise that an idea all started with one or two people.
Our focus has since been on investing in corporate spin-outs, because that's what we knew, that's what we understood." He continues: "Today we're the leaders in that space. We've created 70 start-ups and some of those are very big."
As a venture capitalist, Berry says that he has seen businesses go from someone tapping him on the shoulder with an idea to being sold for $100 million. "It's always amazing to me," he says, "That people don't realise that an idea all started with one or two people."
Berry's advice is that ideas and creation are "absolutely critical" and that the passion around it is crucial.
The secret of commercial success? "Compelling means you must have it, "says Berry, "so if your customers aren't pulling your arms out for it then maybe it's not compelling. Maybe you think it is, but maybe you've got that wrong. It's critical that when you go on to build a business you don't want to find that the product you created isn't selling."
Harry Berry encourages a business credo: "If you do something today, that already exists, but you do it three times as cheaply, it will be very compelling. Or if it's three times as good as anything else in the market. Anything less than two might still be great, but anything less than two should be a cause for concern because customers will find a way not to use it. There's a resistance to change. Compelling is absolutely critical."
To the adjective "compelling", Berry insists the adjective "instantaneous" is added. "It doesn't matter if something's compelling," he says, "if they don't want it today." As an example, he cited a location-based service created at Brightstar. It didn't sell because nobody wanted it. Today, 10 years later, services such as Foursquare are commonplace.
In conclusion, Harry Berry suggests that optimism clouds judgement when it comes to cash flow. Therefore he recommends that entrepreneurs seeking investment are realistic in their proposals to VCs.
"If you go out to raise money and you commit to doing something on a timescale, and you run out of money, those people who loaned you that money will 'kill' you. You could end up with a business that is successful - you've had the idea, you've done the build and you get diluted out of it."
The event concluded with some of the panellists asking questions of the audience, such as "Have you thought of a worst-case scenario for your business?", "Are you the right person to do this idea or business?". A robust exchange of ideas followed before panellists and entrepreneurs retired for a session of networking.