Gary Elphick’s company Disrupt was among 10 start-up, who graduated recently from muru-D’s accelerator program. The London born, Sydney-based entrepreneur, marketer, self confessed geek, surfie and start-up hustler shares his top ten learnings for building a brilliant start-up business.
Going through muru-D has been an awesome experience and Disrupt Surfing certainly wouldn’t be in the same position having not done it. But for those not fortunate enough to have had the experience I have I’ve written out my biggest personal learnings from the program at muru-D. These are the things that really changed the game for me and for the business.
Don’t focus on capital raising. Focus on sales, customers and bootstrap it (live hand to mouth) for as long as possible. Revenue proves a business model, customers prove demand, and users prove what features are important.
Something I find incredibly hard. It’s referred to as ‘the entrepreneur’s dilemma’ you see so many inefficiencies and opportunities around us but which do you focus on? Once you’ve decided you need to go one step further, you can’t be everything to everyone; you can’t market in all channels and sell all products.
I’m terrible at this but the skill is to be absolutely incredibly focused with everything you do, offer the very minimum in functionality you can, sell really hard to one customer type and put all your effort into one marketing channel.
You can always pivot a business or feature if they don’t work but putting 100% behind one thing is better than spreading your bets and putting 10% into 10 things. Don’t try and boil the ocean. This is easier said than done and I still struggle with it. My advice – See this guy.
Test everything. Put metrics, goals and hypothesis behind everything you can and let the data back you up or break you down. What do you think needs to happen to increase conversions? What colour button will help promote sharing? What evidence do you need to show to get a sale? Test, test, test.
Make a list of all the things you wish you knew and find a way to test them. What you’ll find is you’ll build up an incredible amount of IP by running 1000’s of these small tests. The more you do the more IP you build and the harder you make it for copy-cats.
It’ll give you confidence that your decisions were right and you’re moving your start-up forward. Nick Crocker recently wrote about having one metric and it’s something Disrupt will be implementing shortly.
You’ll never be ready
If you wait until ‘you’re ready’ you never will be. Your product is never finished, your operations will never be perfect and there will always be a backlog. If you wait until you think you’re ready then you’ll either never do it, it’ll be too late or someone else would have already been there. It seems strange to want to add additional stress on top of what you’re already trying to achieve but you really do have to go fast and break stuff along the way, fix it and move on. It’s the only way to move forward. There’s a balancing act between focus and pushing forward fast, it’s cost us a lot of ‘wasted’ $$ to get there especially when you’re dealing with hardware but better to make the mistakes now that when you’re 10x bigger and the issues will be 10x larger.
Australia is an amazing place, with incredibly passionate people and a lot of talent. However, we’re only 23 million people, a small country by all accounts and there’s a huge world out there. You need to prove your business model works on a global scale.
A global business has a much bigger addressable market and thus the opportunity and value of your business is greatly increased. Use Australia as an incubator market by all means but focus on global. I’ve been fortunate enough to explore our business in the US, Europe & China understanding the possible scale gives you the confidence to understand the potential reach you can have. Get a cheap flight, stay in a hostel and get to know your largest potential customer base.
You’re not the first one to go through the challenges you’re facing so seek out advice from people that have already been there and done that. There are plenty of successful Australian entrepreneurs that got help when they were starting and are more than willing to lend a hand to pay it forward. Even an hour a month or the occasional email will help super-charge your start-up. Reach out to people, hook up with them on LinkedIn and ask for introductions. We’ve done this where possible aligning to people and other businesses that can help us in customisation, in working with artists, is sports, in ecommerce. You don’t need to find one person to do it all, build a strong advisory board around you that have experience in each part. Just remember to pay it forward in the future.
Have the hard conversations early
Have the hard conversations up front with your co-founders, discuss the split, agree the contributions and set expectations around time commitments. Doing this early when the business is worth very little is easier than doing it a year or two down the line when it’s worth a substantial amount more. Personally, I’d say everyone including founders should have a four-year vesting schedule without an upfront amount (this means you only officially get ownership of your shares every month for the month you have worked to the commitment you’ve all agreed upfront). This will ensure commitment and fairness across the board. You could even go as far as putting one year cliffs in founder contracts although this will need more consideration.
This is the boring tedious stuff (I loathe it – it’s normally the last thing I do on my list), but get it right now and it will save you heads of headaches. There are plenty of free templates you can download for employee contracts, IP assignment, shareholder agreements etc.
Keep it all neat and tidy on a cloud-based sharing platform. It’ll give you confidence in your structure and makes due diligence easier for any potential partners a lot easier.
Startmate provide a host of documents and there are some recently announced ones from a host of Australian investors and incubators including AVCAL (Australian Private Equity & Venture Capital Association Limited). However, I’m a little concerned about preference share clauses so, do discuss with a lawyer. If you need something more robust visit local Sydney start-up Law Path for legal document and access to freelancer lawyers.
I’m British. There, I said it. My network in London is a good size. When I first got to Australia it was zero. It really is ‘who you know, not what you know’. When you don’t have a good network things are harder to do, such as finding good talent. It’s also harder to get to speak to the right person at a corporate or find the right overseas partner. The more people you know the bigger your network gets, the easier it is to find the right people. You also meet some very interesting people, discover ideas and even make new friends. It’s a long term game.
Start with these – Silicon Beach Australian, Innovation Bay and muru-D
Healthy body, healthy mind
This is probably the most important but hardest thing to maintain. It can be really tempting to let your diet and exercise schedule slide when you’re working 18 hours a day. Being healthy is the single biggest thing that’s kept me sane. You need to exercise regularly (ideally daily), go for a walk, play sport (or go surf), get away from your phone and let the endorphins flow.
It’s proven that people who do this are more productive. Exercise and diet go hand in hand, (and yes noodles are cheaper than steak) and I understand that it’s a hard decision when you’re putting everything you can into your start-up, but eating well doesn’t need to cost the earth. You’ll thank yourself for it post incubator. (Note to self: write a start-up cook book).
Mental health. Now this is really important. When you’re riding the roller coaster make time to speak to other people. The value in an incubator is being in close proximity to other founders going through the same thing, but you can always go to meet ups.
It’s really important to talk about where you are and what challenges you’re going through. It’s been clinically proven that founders are more susceptible to mental health challenges so be extra vigilant of those around you (and yourself). (See exercise and endorphins above!).
My suggestion: read this award winning article by Jessica Bruder on the psychological price of entrepreneurship.
Also, don’t be afraid to see help or ask someone else in the group, RUOK or visit mensheds.org.au
That’s it: take it, leave it, add to it, do what you will.
These are my own views, they do not necessarily represent the views of Disrupt, Telstra, muru-D or others. There will be spelling and grammatical errors; I’m dyslexic, deal with it.
The above post originally appeared on GaryElphick.com
Follow Gary on @garyelphick