10 Things I learned from building companies

1 Netflix and Chill.

A product/service without marketing is like Netflix without the chill. You can market a poor product or service quite successfully, but your customer churn will be huge. If you have a quality product or service but do not market it, you will gain some customers through the network effect, but it will never reach its potential. I have worked with many founders who always thought “once we release this next new feature, we will gain loads of customers” and I’ve been guilty of this myself, the reality is that a product or service must be backed up with equally effective marketing for it to succeed.

Some products are that new/good that they can achieve success with the network affect alone, chatGPT is a recent example of this, but remember, there is often a carefully crafted professionally delivered marketing campaign to make it seem like a product is achieving success via its network alone.

2 No one will love the company as much as you.

Your team, users, investors, customers, suppliers etc may say they are fully behind and will do whatever it takes for the company to succeed, but they are never as invested as yourself. Yes, they may align with your vision, they may believe in the culture, they may share in some of the success through share options or otherwise, but it is your company.

So, what does this mean, as a founder/owner your job is to create the environment that allows the members of your company (team, users, investors etc) to believe in your vision strategy, and give them the tools and support to deliver it. Realising that your team doesn’t want “success” as much as you do is ok, it is to be expected, and you shouldn’t look down on those who are not as committed as yourself.

I often work in the evenings and weekends because I enjoy it, like writing this on a Sunday. Would I look down on a team member who doesn’t do the same? No because it’s not their company, you can’t expect everyone to work the same as yourself.

3 Personal brand is as important as your product brand.

As a serial entrepreneur, if one is allowed to call oneself that, I am aware of my own “brand” and the image I project. Facebook is for silly memes and family photos, along with chatting with friends, LinkedIn is for professional content, twitter is where I have a moan.

I’ve done all the psychometric tests over the years, unpredictably I’m an INTJ, but this doesn’t bode well with making connections and selling, so you reinvent yourself for what is required to succeed.

4 Determination.

Related to loving your company, you must be very determined to make your company succeed. For every 1 success in your company there are 99 knockbacks, you must learn to take these on the chin and move on.

The saying goes that, for every company that failed, there is a CEO/Founder who gave up. Whilst not 100% correct, as a founder it is down to you to make the company work, never give in, never give up, never take no for an answer, never be afraid to ask. Most of the time there is a way out of a problem that will make you stronger if you put your mind to it, but if you wait for other people to solve your problems, you will fail. This isn’t to say that your team shouldn’t have responsibilities, but you as the founder are ultimately responsible, if they fail, it is because you failed, not the other way around.

5 Be able to do any role within the company but know when not to.

I am fortunate that I can code and do pretty much anything technical, I cannot draw however, I’m terrible at Pictionary. When you start a company, it is either just you, or you and a very small circle of people. You will inevitably be involved or responsible for everything, in some cases having to “roll your sleeves up” and get busy. I take pride in knowing that I could do any job in the company but knowing which jobs I can do well and which I cannot, is what is important. Knowing when it is better to have someone else carry out this work instead of yourself but knowing what “great” looks like is the key to a successful team. You must be able to set goals and give feedback to your team, they need to know what is expected and whether they are achieving or not.

6 Scaling without spending (much) on marketing only gets you so far.

Related to point 1 (Netflix without chill), I see many bootstrapped start-up’s attempt to scale without a capital outlay, or a very little spend, relying instead on “sweat equity”. This will get you so far, even to the point of a lifestyle business, but if you want to really scale the business then you are going to need to find some capital.

In my opinion, capital in the form of debt is probably the best first point of call, this capital must be paid back and therefore forces you to construct a budget that will enable this, but does come with personal risk, as it is likely you will need to put down your own security. Other options include friends and family investment, but make sure you really can deliver, as these are personal relationships. Then there is angel investment, difficult to raise unless you have a high net worth network and a really good idea and track record.

So, the point I make is, you can make it to a lifestyle business with bootstrapping, but if you want to scale beyond making a very good salary, then you need to plan to raise capital.

7 You probably don’t need more employees.

Adding employees to attempt to scale your business is the easiest and potentially the riskiest way of scaling. All companies need employees, but more importantly all companies need the right number, the right individuals and crucially, hired at the right time.

After generating a positive cashflow, or after an input of capital by other means, it is tempting to use this quickly by hiring more staff, which will increase your burn rate, on the anticipation that a higher burn rate will equal even more profits and more positive cashflow. The fallacy here is that it is difficult to predict the return on spend in the early and growing stages of a company. Even more risky is that you increase the probability of failure as your burn rate increases, there is a fine balance between sustained growth with the right amount of risk.

More employees do not always equal more revenue/profit, but it can. The point being that you need to forward plan the cash flow that more employees will create, and importantly can you guarantee this, as employees will need to be paid, and this is an ongoing fixed cost. Whereas a performance marketing campaign or other variable spend can be turned off and on.

That is not to say you should not hire employees, just be sure that this is the answer.

8 Forget everything you think will happen post launch

You can plan for everything you think will happen after you launch. You can build models, you can create roadmaps, you can anticipate problems ahead. None of these will be correct. This is not to say that the work is wasted but be prepared for the unknown and unexpected. What matters is how you react to the challenges of post-launch, how quickly and decisively you act. Even then you won’t get it right most the time, again it is about adapting and overcoming. These are not distractions; these are what will shape your business.

9 Passion

The deference between a founder and a CEO is often the passion for the purpose of the company. For a founder the priority may be the purpose and success of the vision, with monetary success coming second, with a CEO it should be financial success first – that is what they are there for.

For Founder/CEO’s you must mix these to aspects of the role equally. A founder in the early stages who is only concerned with the financial performance of the company, with only a scant regard for its purpose, or not really getting behind its purpose, will run out of steam. Conversely a founder who is all about the purpose but is not concerned with the financials is doomed to fail. The latter is often the case.

For example, my company Relovd (in development) I have a passion for the company purpose, I really do believe in the company mission; To enable the circular economy, whilst at the same time, the economic model works, it should (fingers crossed) by a financial success.

10 Ideas (for starting a new business)

Are worth nothing, it is all about the execution. The number of people I meet who are precious about their ideas and are fearful of sharing, especially those who only have an idea. I've been asked to sign NDAs, I've been told vague concepts and I've been asked to swear an oath.

An idea isn't worth anything I always reply, it's all in the execution. Only you can execute your idea.

I also say, share your ideas with those you trust, get feedback, each time you explain your idea you are practicing for a pitch and validating your idea, this is priceless.