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Start-up Advice

3 Ways To Take Your Business From Start-Up To Success

Clive Butkow, the CEO of GroTech, a South African venture capital firm that supports technology start-ups, provides his insights on how to take your idea or product and grow it into a sustainable, successful business.

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You hear more about how to start a business than how to grow it into an asset of value. Clive Butkow, the CEO of GroTech, a South African venture capital firm that supports technology start-ups, provides his insights on how to take your idea or product and grow it into a sustainable, successful business.

They say that eight out of ten new businesses fail in their first 18 months of operation. This is a sad story because it shows that people with big ideas and the guts to try and make a go of them are somehow losing their way not too long after they’ve got started. But the funny thing is that all the advice to entrepreneurs out there focuses on how to start a business.

It doesn’t support them in understanding how to grow a business, and how to go from concept to a fully fledged organisation.

Since I am in the position of having worked in and for successful and unsuccessful businesses and now funding tech businesses in their growth phase, I have learnt some hard lessons about what it takes to make things happen along the way.

There are many things that you should and should not do when growing a business.

Related: How To Launch Your Business Like You Mean It

There are however three key ingredients that every start-up requires to increase their probability of success:

1. You need the best team on the planet

Building a business is hard and trying to do it by yourself is tantamount to getting into a boxing ring with a professional boxer with one hand tied behind your back.

In my experience, successful startups understand that there is no I in “start-up”. They, at a minimum, need someone to build the stuff and someone to sell the stuff. They need ‘execution intelligence’ – which is at least one member of the team having been involved in building a business before.

They require professionals with expertise and experience in every aspect of their business. These could be advisors or board members, and not necessarily full-time employees when they start out. That team has to be in place to take care of product development, marketing, sales, finance, PR, customer relations and admin.

You can’t do it all yourself, or with your aunt who did a bookkeeping course once. At some point you’re going to have to start hiring, and when you do, don’t settle for second best; hire rockstars.

The one thing every entrepreneur has at their disposal is equity – they start out with 100% of their company. This equity is a valuable way to persuade the right people to come on board, even if you don’t have the cash to pay them initially. Remember 50% of a watermelon is better than 100% of a grape. Don’t just give equity away but make it vest over at least a four-year period.

2. You have to achieve product-market fit

Building a successful business isn’t about “if you build it, they will come”. Don’t believe that for a second as it only happens in the movies. Before you invest too much in your new product or service, you have to be sure that the market wants what you are selling and that they are willing to pay for it.

Get out of your building and go and speak to at least 100 customers to find out what problem your product or service is solving and if they would buy it.

Remember your product is not your product; your solution is your product. Customers buy solutions and benefits not products, services or features.

Do the initial research as it will cost you far less than building something that no-one wants. Once you have a few paying customers and some good reference-able sites, you most likely have achieved product market fit. You have built something that solves a customer problem or alleviates a customer pain. You are now ready to start scaling your business.

Related: 5 Ways To Market Your Business For Free (Or Nearly Free)

3. Make sure you have the right people who can sell your product

Remember sales solves everything as nothing happens until the cash register rings. It’s all well and good having a product and having a market, but you have to know how you are going to connect the two.

You need salespeople who really know how to sell your product or service. You need business development managers to compile a strategy on how you will go to market by leveraging other companies distribution channels for your product.

In my experience, the best salespeople initially are one or more of the founders of the business. They have the passion to act as your product’s brand ambassadors and persuade customers of your value proposition.

And remember that your satisfied clients will ultimately become your best salespeople, so don’t neglect the sales you’ve already made.

Take your customers and turn them into raving fan clients, and they’ll be out there getting the job done for you. It takes six times more effort to sell to a new client than a current client so remember the real work starts after the first sale.

Don’t forget about the cash!

While these are three of the key ingredients you have to get right when building a startup, they aren’t the whole recipe. Even if you’ve got these three things in place, don’t forget that you still need to collect the cash.

Most businesses fail from a lack of cashflow and not just a lack of customers. Make sure you’ve got these bases covered, and that the cash is coming to you, and you’ll be well on your way to growth.

Clive Butkow is the former Chief Operating Officer (COO) of Accenture South Africa and has 28 years management consulting experience. During his tenure at Accenture (formerly Arthur Anderson and Anderson Consulting), he played numerous leadership roles including Managing Director of Accenture South Africa’s Technology business as well as Managing Director of Accenture’s Resources and Utilities businesses. As the CEO of GroTech, he’s got some advice for future CEOs – below is an op-ed he’s written to give you some insight into his ideas.

Start-up Advice

Start-ups: Creating A High Tech/High Touch Environment

Here are some practical tips for creating a ‘high tech/high touch environment’.

Dirk Coetsee

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In this fast-paced tech orientated world things are changing at a frightening yet exciting rate. It is so easy and so quick to create a tech start-up from anywhere in the world and office space as a requirement to start up has become obsolete, your garage will do. Yet because it is so easy and so cost effective for so many to create a start-up it is so hard to stand out amongst this entanglement of serial tech entrepreneurs and innovative start-ups.

The millennial generations’ general paradigm of thinking, which is more open –minded and entrepreneurial is slowly but surely breaking through the barriers of traditional business operations, mechanisms and methods, imbalances are created, however, when tech is the sole focus and people are forgotten in the process. As is so evident throughout history eventually by some means balance is sought in order to create equilibrium.

This writing serves as advice to all tech start-ups to seek balance from the onset in creating a “high tech/high touch” environment. A “High tech/high touch” environment can be defined as a balanced approach where both tech solutions, and of equal importance, team empowerment and inspiring leadership form a potent combination of enduring success.

Related: What Is Limiting Your Entrepreneurial Mindset

Technology by itself cannot solve everything but technology applied in unison with a strong people centred approach can be a powerful catalyst towards solving at least some of this worlds’ major challenges.

Although many factors such as for example fiscal discipline and other management controls play a vital role in your start-ups’ success do not forget to create an inspiring environment for your team within which they feel safe and united in purpose. Key to business growth is the individual growth of all team members and no stone should be left unturned in moving from a toxic and/or culture of complacency to a learning and growth culture.

Co-create an inspiring vision for your team and get their full buy-in. If you cannot do that you might have to put in more effort when it comes to your own leadership skills and/or “free up the future” of complacent and lethargic employees whom simply do not want to work hard to collectively actualise your business’ co-created vision.

Although very hard, it is worth the effort to only hire people that are passionate about and have integrity in what they do. If a sustainable and successful “high tech” environment is the aim ensure that it is underpinned by very smart hiring and training practises further enhanced by a good dose of inspirational servant leadership.

Generally speaking, everyone wants to feel part of something bigger, exciting, and inspiring. It is your responsibility as founder and leader to create a motivating and energetic business climate wherein every team member is empowered to execute at a rapid pace and with a “zero defect” mind-set. A team environment wherein everyone sincerely wants to be great at what they do and are energised by ‘small wins’ on the path to actualising the grand vision of the company is far more inspiring and sustainable as opposed to an environment where ‘subordinates’ are only managed and basically forced to do their jobs.

Related: The Anatomy Of Peak Performance

Sincerely care for your people yet maintain balance,as caring does not mean you treat them like children. Caring means taking great interest in both their career and personal development, and to be tough enough to eventually let those go that does not constructively contribute to a positive growth culture.

Here are some practical tips for creating a ‘high tech/high touch environment’:

  • Have a balanced approach in hiring. Hire for technical and people skills and ensure that there is a clear development and training plan for all team members that is reasonable and attainable.
  • Find your purpose as an entrepreneur and with great enthusiasm model that purpose at every juncture as to inspire others to find their purpose.
  • As ‘culture eats strategy for breakfast’ guard the positive and growth culture that you model as a leader with all your energy and remove anything and anyone from the aforesaid culture that is counter-productive to your business performance.
  • Sincerely care about and show that you care about each individual team members’ personal and career development.
  • Regularly put having fun and inspiration high on meeting agendas as we generally take ourselves too seriously.

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Start-up Advice

Why You Shouldn’t Quit Your Job To Start A Business

Rather than taking the plunge, consider dipping your toe in first

Yannick van den Bos

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As the world becomes more digitized and access to the internet is something we all enjoy, more and more of us want to quit our day jobs to start our own businesses. The word “entrepreneur” is thrown around a lot these days, with many people seeing it as a means to enjoy a whole new level of professional, financial and personal freedom.

It is not difficult to see why, either. Having the ability do what you love, when you want and on your own terms is certainly attractive, especially when you could potentially build it into a sizeable income. Don’t be too quick, however, to abandon your day job to pursue your entrepreneurial dreams. Many of today’s best-known entrepreneurs consider doing so to be reckless and unnecessary.

“Entrepreneurs” are rarely the modern-day maverick who suddenly decide one day to quit their jobs and pursue their dreams. After all, quitting a job to pursue business is risky, especially without having a safety net in place. In fact, the majority of people who decide to start an online business will fail within the first year.

Further, there is far more involved in transitioning from being an employee of others to becoming your own boss than you may realise. Changing your mind-set from that of an employee to an entrepreneur is a major key to successfully bridging that divide.

Related: 3 Key Law Areas To Know When You Launch That Start-up

If you operate with the mind-set of an employee — a person who is used to working for others and being paid by them – you will almost certainly fail. When you work for others, you do what they tell you to do. As an entrepreneur, you decide what the next best step is, and you execute that step in your day-to-day actions. The latter requires both a significant mind-set shift and major discipline.

At the same time, in our rapidly changing economy, you would almost be doing yourself a disservice not to start a business. But, how can you do so while working full-time?

Take the “hybrid path” to entrepreneurship

If you’re willing to sacrifice much of your free time now to reap the rewards later, you have what it takes to become an entrepreneur. Often called the “hybrid path” to entrepreneurship, many successful entrepreneurs started their business while still being employed full-time.

Research has shown that those who kept their day jobs while starting their businesses were 33 percent more likely to be successful than their risk-taking counterparts.

Leveraging your full-time job in the early days of your business, allows you to build on firmer financial ground, increasing the likelihood that your enterprise will last and thrive through the initial stages.

Related: What You Need To Know About The Lean Start-up Model

In addition, being entrepreneurial within your existing job allows you to build the necessary skills and traits you will need as you transition from your employee to entrepreneurial role.

Being impatient and chasing short-term gratification by quitting your job and going all-in, is risky and often ill-advised. Building slowly and steadily for the long-term is often the wisest course of action.

Today, it’s more important than ever to start a business

Still, with all that being said, the time couldn’t be more right to start your own business and become self-sufficient. Unlike in years past, having a job no longer guarantees financial security.

Rapid developments in technology and the ever-increasing digitization of our world puts creative and business-building tools in the hands of everyone. Whether you have skills to market or a great idea for a product, you too could be the next Bill Gates or Elon Musk.

Even if you set your sights a little lower, consider what skills you have that others would gladly pay you for. Figure out what you can charge per client, and how many clients you would need to completely replace your income. Unless you’re already earning seven figures, you’ll soon realise that the numbers are not that daunting.

Related: 6 Resources For Start-ups Looking For Funding

I was able to build my first business through affiliate marketing With affiliate marketing, you don’t have to create your own product. Rather, you earn a commission by promoting other people’s products.

Though the thought of running your own business, spending your days working on something you’re passionate about, and choosing how and where you spend your time is enticing, realise there are days if not years of sleepless nights, cash flow shortfalls and mind-set hurdles between you and your destination.

By building your business while working full- or part-time, you will have the cash flow in the short term to get your enterprise off the ground. Once your business begins bringing in an income which rivals that of your day job, then and only then should you consider whether to pursue it full-time.

Building a business is not for the faint of heart. But, if you’re willing to work crazy hours, delay gratification and learn from your failures, you can build both a business and life like few others. After all, “Life is too short to be living somebody else’s dream.”

This article was originally posted here on Entrepreneur.com.

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Start-up Advice

How To Survive 150 Straight Rejections

And come away smarter, tougher, and more successful.

Joe Keohane

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Sam Sisakhti had an idea for an e-commerce company called UsTrendy. It would sell clothing made by talented, unknown fashion designers from around the world — acting as a marketplace for great styles that could not be found anywhere else.

It didn’t matter that he had no experience in fashion or building a brand, or that he had just quit his first job out of college after only four days. What mattered was that he believed that this idea could be huge. And to get it there, he figured, he needed to raise money. A lot of money.

Initially, it seemed easy. On their very first pitch, Sam and his associate landed a $500 000 offer. “Crazy,” he says. But there was a catch: The VC required them to move to Silicon Valley to receive the money. Sam’s right-hand man didn’t want to move. Sam decided he’d just do it himself.

Related: Beauty Of Failure: The Art Of Embracing Rejection

So he moved, failing to understand that investors buy into a team, not just an idea. He promptly lost the funding. No matter, he thought. He’d just get more money

Thus began Sam’s real journey. He started pitching to anyone and everyone, regard-less of their field of expertise. It went badly. By his count, he was rejected around 150 times in a row over 18 months. Worse, he kept revising his business plan based on their feedback, reducing it to an ever-changing muddle that made it even harder to sell.

This beating culminated with a meeting with a VC who, humiliatingly, was a family friend. “He threw my business plan in the trash, right in front of me,” Sam says. “And I just remember thinking, Man, what am I doing?”

Entrepreneurs hear a lot of nos. In fact, it’s probably the word they hear more than any other, especially starting out. It can come in torrents. It can get crushing. The key, as Sisakhti learnt, is twofold: To survive it, and to learn from it.

And here’s what Sam realised: He needed to stop pitching. Not every business needs funding, nor is every business ready for funding.

“I was spending all my time pitching, and I wasn’t spending any time building the business,” he says. So he scaled back. “I went from wanting to create the next Amazon to just saying I wanted to grow a business organically,” he recalls. “I just wanted to pay for a modest, middle-class lifestyle.”

Freed from the ceaseless need to fundraise, Sam drew on his natural creativity and resourcefulness. He’d always thought he needed funding to help recruit young designers. But now he started to get creative. He recruited them right out of design school — using student brand ambassadors to get around rules about recruiting on campus. Soon he had a thousand. Then he linked up with London Fashion Week to do a show for emerging designers. He pitched a design competition, and that got him 3 000 more, along with a bunch of press coverage.

Related: Motivation-Boosting Tips From 8 Of The Greatest Entrepreneurs

Now he had inventory,  revenue, and exposure. He was feeling good. One night, over dinner, Sam sent a magazine piece to mega-investor Tim Draper, who had rejected him twice already. Fifteen minutes later, Draper responded, saying he wanted to talk. Eureka.

“I think the reason he was interested was that I’d shown I was going to do this with or without the money,” Sam says

He even got a little cocky. “I told him that it’s just a matter of time: ‘If I have your money, I’ll get there faster, but if I don’t, I’ll still get there. And then the valuation’s just gonna be that much higher to get in.’”

Draper invested $1 million in a first round, then came back for a second round. In total, UsTrendy has raised more millions since, grown by 300% annually in its first few years, and worked with more than 20 000 designers from more than 100 countries. It has attracted more than two million followers on social media and other digital media channels.

Now when Sam reflects on all those no’s, he thinks not of rejection — but of how it changed him. How it showed him the way. “It was awesome,” he says.

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