Since starting my own company almost 2 years ago it’s been a roller coaster ride of ups and downs, good and bad clients, late nights and more networking events than followers on Twitter. But once you start it’s a bug that never stops biting and I now have 3 companies that I’ve founded or co-founded. As most people who own their own company will attest it’s the most rewarding experience and most of us would never go back to working for someone else.
Having said that, there’s a big problem in the UK - entrepreneurs and start-ups still don’t get the correct level of help and guidance they need. As a result, for every start-up or company that is created there are probably 10 or more that never see the light of day. As a sole entrepreneur it’s even more difficult to get going and once you are going to keep up that momentum to find funding or grow your business.
Where the problems lie
You only have to look at the debacle with Capital Gains Tax in this country to see some of the problems start-ups face from the very place that should be helping. The Government need to play a bigger role - they’re simply not doing enough. They have started to make the right noises with Government-led initiatives such as the Catalyst Awards and the recent opening up of various Government data. Although any positive step they make is generally followed by a negative one. For example, there are some ridiculous restrictions in place for people wanting to use the data mentioned above in a commercial way.
If the Government can’t cut it with the people they hire they should be looking toward people who have been there before. There are a number of successful UK entrepreneurs and investors that I’m certain would be happy to help the Government make a difference.
I’ve had first hand experience of some of the problems faced with being a sole entrepreneur. Those with teams seem to get more help and guidance and I’d like to see some effort put towards those doing everything themselves. Even if this means putting lone entrepreneur’s together, which is being done by entrepreneurs rather than the Government. This is generally the trend and is echoed in events like OpenCoffee Club, MiniBar and others - where individuals are doing the job of those in power.
The British start-up culture compared to Silicon Valley
The start-up culture in the UK is very different to that in the US - although there is no shortage of talent here the support structure we have is limited. Positively, the culture is being created by the very start-up companies and entrepreneurs that need it. There is a buzz about the web and tech culture in many parts of the UK (London, Manchester and Brighton, for instance) but we could be doing so much better with improved help from bigger companies and you know who (our friends the Government).
If we Brit’s could also get past our fear of failure the start-up culture would almost certainly benefit. Places like Silicon Valley have a much better perception of failure, which I believe inhibits some entrepreneurs and business start-ups over here.
Angel funding as a lone entrepreneur
The conversation usually goes something like this.
Me: “Hi, I’m Danny and I’ve launched My Neighbourhoods. We’ve been up and running for a while now, have thousands of registered users, tens of thousands monthly visits, great press and excellent search engine positioning. I’d be interested in talking to someone about potential angel funding to take things further.”
Mr Investor: “Great. How big is your team? Who does the design, development, PR and management of your business.”
Me: “Me, I do it all.”
Mr Investor: “Oh, ok. Let’s keep in touch.”
There’s a distinct lack of a clear path for Angel investment - not everyone is looking for VC funding (myself included) and it’s not easy (or cheap) to approach Angels, even with the increase in sites trying to put people in touch with investors. That’s part of the reason I applied for the Sun Startup Essentials program, which I’m delighted to say My Neighbourhoods has been accepted for. More companies like Sun with programs doing what they’re doing would go a long way to helping alleviate some of the problems. And more movements like the excellent Second Chance Tuesday, Seedcamp and OpenCoffee Club can’t hurt.
Do you actually need funding?
Given the prevalence and status of “being funded” a lot of people probably rarely ask themselves whether they actually need funding. It might prove an advantage if entrepreneurs focus on a business plan that makes money early on, rather than one that requires funding from the beginning. Understandably, you stand a better chance of getting funding when you need it if you prove your business makes money. In most cases, this shouldn’t be as difficult as it sounds. For instance, if all or some of your business charges £25 a month you only need 650 paying customers to bring in £200,000 a year. The guys over at 37 Signals have built their entire business around this model.
Right, better start taking my own advice…
