What’s the best way to raise funds for a startup?

Alexander Flint Mitchell, MSc Business Innovation with Entrepreneurship alumnus and founder of Blind Cupid shares his experience of raising capital for his business venture.

Picture of business man launching into the air.

Like most first-time entrepreneurs, Alexander was a total novice when it came to funding startups before setting up his own business.

Having now secured £175,000 to launch, with the prospect of completing fundraising over the next six weeks, he shares his experience of raising capital for a startup.

Angels and venture capital

When Alexander began fundraising for Blind Cupid, a matchmaking app that uses systematic philosophy and artificial intelligence to match users based on their fundamental values, he took a traditional route of approaching angels (high net worth individuals who provide financial backing for startups) and venture capital firms.

“We contacted many venture capital companies and had some very successful conversations with them,” explains Alexander. “These companies are usually specialists in a certain field and it’s common to be asked to deliver as many as five or six presentations to secure funding. While we would obviously spend some of this time talking about the business idea, the key thing to get right was the financial information.”

The downside of this method of fundraising? Time.

“Venture capital funders are demanding and even getting a response from them, never mind retaining their interest, requires a lot of time and effort,” explains Alexander. “There’s a lot of back and forth, often with your whole team needing to attend calls or presentations, which can feel never-ending when you’re in it.

“We also faced difficulties with our product not fitting neatly into a specialist area. The app we’re developing combines matchmaking with brand new artificial intelligence that has never been built before, and so there are no investors currently specialising in it. Given the amount of money that venture capital funds invest, it’s understandable that they would prefer to go with something tried and tested. We raised around half the funds we needed through this method, but I began to look for alternatives to speed things up.”

Gaining crowd appeal

Many different methods of fundraising are covered in the Entrepreneurial Venture Creation module taught at Birkbeck, among them crowdfunding.

Alexander admits to being sceptical to this approach: “I had the impression when I started that crowdfunding was on a smaller scale and more about conventional ideas than disruptive new businesses – I had no idea that companies do their series A and series B rounds on crowdfunding.”

While individual investment amounts can be much smaller, as little as £10, on crowdfunding sites, Alexander now sees this as an opportunity:

“Compared to venture capital, crowdfunding is a really quick and innovative way to finance startups,” he says. “The main difference is that our investors through crowdfunding are likely to also be our users, which is really exciting. Even if they only invest a tiny amount, they will benefit from a future IPO – it’s similar to holding shares in the stock market.”

The personal touch is also something that appeals to Alexander and the ethos of Blind Cupid:

“We aren’t just trying to match people together; we really want to make sure that these matches are accurate and that once you meet someone you will stay together. We’ve done it for 80% of our beta test users, and now we want to do it throughout the rest of the UK and world. It’s an unusual business concept in a way, because we don’t want people to come back – we want people to find the person that’s right for them.

“Our business model is very different from other players in this market because of this — and other reasons. We offer a premium service which gives our users access to podcasts, blogs and more written by experts that advise them on every aspect of their lives. Topics include how to discover who you really are, what self esteem is and how to build it, how to nurture a healthy relationship and more.”

Blind Cupid have now launched their crowdfunding campaign on Crowdcube. For Alexander, it will be a relief to move to the next stage:

“When you’re looking for funding, it feels like it’s never-ending, but I know that when it’s complete I‘ll forget the months that it took. Many things in life are a learning curve and you find what suits you best. It’s great to finally see it all come to life.”

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“I cannot stress enough how important it is to get women a seat at the table.”

Winner of Best Business Idea at this year’s Pioneer Awards, Hetty Bonney-Mercer shares how she plans to empower women in Ghana with her business, FemInStyle Africa.

Picture of Hetty Bonner Mercer

A great business idea begins when someone identifies a problem that needs solving. Sometimes, these are problems you never knew you had, as the buyers of products like these will testify.

In Hetty Bonney-Mercer’s case, however, the business idea came from a problem she found impossible to ignore. Taking home the Best Business Idea prize at this year’s Pioneer awards, it looks like the judging panel agreed.

FemInStyle Africa is a magazine for women, by women, encouraging them to live their lives to their full potential. The idea for the magazine came from a desire to present an alternative narrative for women in Ghana.

As Hetty explains, “I first had the idea when I was part of a group of women whose gender activism took Ghana by storm in 2017.” The group wanted to flip the script on toxic gender narratives, but they weren’t able to do so without resistance: “The more politicised we became, the more backlash we received. Despite being a population with an equal gender split, the idea of women occupying media spaces was unacceptable.

“In Ghana, the traditional view that the role of women is to keep the home still persists. Just 13% of national politicians are female, and when a woman is given a platform on events such as International Women’s Day, it is always a certain type of narrative being pushed; that keeping a home and a husband is the most important thing, no matter what a woman has achieved. On International Menstrual Hygiene Day, the topic was discussed by an all-male panel!

“My co-founder and I realised that we needed to create a space where we could amplify the voices and experiences of women exclusively. We wanted to change a narrative that is harming future generations of girls.”

Hetty had been working on the early stages of her business idea when she saw an email from Birkbeck about the Pioneer programme.

“I thought that this was the opportunity I needed to develop the business. I sent it to my co-founder and she encouraged me to go for it.

“I gained so much from the programme: I made some really great friends and received incredible support from the speakers and fellow students. It was amazing to be in a room filled with so much passion: everyone there had a problem to solve. Coming from a background in Politics and International Relations, I learned the practicalities of running a business from some amazing female entrepreneurs who spoke on the programme.”

The FemInStyle Africa magazine website is currently under construction and will feature five columns: politics, gender activism, working women, financial advice and travel and style. The target readership is women aged 16-45, although Hetty wants the magazine to be read as widely as possible: “We want sixteen-year-olds to read the politics column or our profile of working women and see women who they’ll aspire to be like. For more mature readers, we want them to read something and see their own experience and values reflected. We want young people to see the possibilities of what could be, despite the societal pressures around them.”

The online magazine is a starting point, but Hetty’s vision for FemInStyle Africa extends much further. “We’ve set ourselves a six-month deadline to produce the magazine in print as well. In Ghana, data is a matter of class. Not everyone can afford to be online. We’re hoping to make the magazine free to reach as many people as we can.”

There are also plans in place to establish a mentoring programme alongside the magazine, providing further opportunities to empower young Ghanaian women. It is a project close to Hetty’s heart: “I cannot stress enough how important it is to get women a seat at the table. We want women to come on this journey with us and see that their futures are not pre-determined.”

Further Information:

 

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“It’s crazy to think that an idea I had when I was 21 is now my full-time job.”

Alexander Flint Mitchell took home the prize for Best Business Pitch in June’s Pioneer awards. He reflects on a life-changing year of building his business, Blind Cupid.

Picture of Alexander Flint Mitchell

When Alexander Flint Mitchell enrolled onto Birkbeck’s MSc Business Innovation last September, it was with a view to changing career direction and developing the business idea that had been on his mind for the last five years.

Handing in his notice just one month later, you could say things had moved a little faster than expected. “Looking back on it, that was probably a bit naïve,” Alexander admits, “but if you want to achieve something big, you’ve sometimes got to take a leap into the unknown.”

The motivation for this leap of faith? A little idea for an app called Blind Cupid.

Blind Cupid is a dating app with a difference, using a never-before-used science to match people based on their fundamental values, giving users the chance to see bios and compatibility scores before they reveal pictures to potential matches.

“A lot of dating apps claim to be all about personality,” says Alexander, “but it’s really just a slogan. In their questionnaires, they will ask about polarising issues like politics, which is valid, but simply agreeing on something doesn’t mean that you’re compatible. Take Brexit, for example: people voted Leave on both extremes of the political spectrum. It’s essential to understand the rationale behind the belief.

“The questionnaire that we use for Blind Cupid goes right to basic principles. The greatest feedback we have received so far from users is that they could see the value in the product even from just filling out the questionnaire – before they’d received any matches. When we tested the product, 80% of the test group went on four or more dates with their matches – that’s way higher than anything else in the market.”

Was the concept for the app born out of Alexander’s personal experience? “People ask me that a lot,” he says, “but in reality, the idea just came to me in a lightbulb moment, fully formed. I came up with the concept aged 21, while studying Law and working in the City. I found the reality of being a lawyer very boring and would end up spending most of the day daydreaming about this app. I knew that I was going to do it eventually, but I wanted to do it properly.”

In 2019, Alexander applied for the MSc Business Innovation at Birkbeck, specialising in entrepreneurship. “Studying in the evening meant that I could continue working in the City until the business was up and running,” Alexander explains. “I thought that, worst case scenario, I could find a role in venture capital, but I really wanted to give Blind Cupid a go.

“The course was everything I wanted to learn. One of the early modules, Entrepreneurial Venture Creation, required us to write a business plan. I wrote a business plan for Blind Cupid, and that’s when I decided to quit my job.”

As Alexander worked through the masters and the Pioneer programme, his business and networks grew. “I’ve made some amazing connections and put together a dedicated team – we’d meet at 8am and still be working together at 1am, before we were earning any money to do it, which just shows the commitment we all have to the business.”

Alexander’s Pioneer experience culminated in June’s virtual awards ceremony, where he took home the award for Best Business Pitch. “It was a shame not to be able to do the finale in person, but I was really surprised and pleased by how many people came along to the virtual ceremony. When pitching Blind Cupid to investors, it usually takes a full hour to go into all the detail, so drilling it down to three minutes was a real challenge. I’m thrilled to have won the Best Business Pitch award; it feels like all the hard work is paying off.”

Alexander is currently fundraising for Blind Cupid, with the aim of getting the product on the market within the next three months. Encouragingly, it seems that he’s also hit on an idea that can withstand the current tough economic conditions: “Strangely enough, the dating industry is booming at the moment. Regardless of what’s happening in the economy, people have a natural desire to have someone in their lives romantically, and that doesn’t go away in a recession.

“The decision to do the master’s was a life-changing, life-affirming decision. It’s crazy to think that the idea that I had when I was 21 is now my full-time job.”

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Why Businesses Fail: Business Plans & Financial Models

Welcome to the Why businesses fail series. This is the fourth of five blogs that delve into the reasons for businesses failing and offering solutions. This series was launched by Lucy Robinson of Birkbeck Futures and Ghazala Zia from Windsor Swan. In this blog, they share why having a carefully considered business plan is essential to the success of your business.  

Lucy Robinson is the Employability Consultant for Business and Enterprise at Birkbeck Futures. She runs the Pioneer programme for aspiring and early-stage entrepreneurs and hosts an enterprise series on the #FuturesPodcast.

Ghazala Zia is a Venture Capital Advisor at Windsor Swan, a boutique London business advisory firm. She has an extensive legal background, and currently specialises in advising start-ups of all stages on funding, strategy and business analysis.

We all know the importance of a decent pitch deck when it comes to presenting a business idea to investors, but ultimately, they’ll be looking at the detail behind the pitch when making their decisions. Once you’ve started your business and got a few customers, you should be looking at your business plan and preparing it for an investor. This seems early but is the right time because that’s how long it takes to prepare for investment.

Investors might not ask for a business plan straight away, often they’ll request to see this after a few meetings. Entrepreneurs often wait until they’re explicitly asked before creating a business plan, which isn’t setting yourself up for success.

In reality, a business plan is a living, breathing document, not just something you rustle up on request for the purpose of your funding application to an investor. Showing an investor, a rushed, poorly considered, or insufficiently detailed business plan won’t fill them with confidence.

A detailed and carefully considered business plan isn’t just important for impressing investors – it’s one of the most important tools in your arsenal as an entrepreneur, and when used correctly it can be incredibly valuable for planning ahead, making decisions and staying on track.

The business plan should work for the life cycle of the business, which is approximately 3-5 years. Consider the milestones you’ll reach and issues you’ll face within this timeframe. It should be a professionally written document that you and your team refer to time and time again, meaning that everyone is literally on the same page. It’s not static, and should be amended as you go along. This allows you the flexibility to adapt to new circumstances and continue planning ahead.

As well as your business plan, you also need a detailed, well-evidenced and realistic financial model. The first question to answer here is that of why your business needs funding in the first place. Where are you hoping the business will go in the next 3-5 years? What specifically will the funding be spent on? How have you arrived at these costs? How will the meeting of these needs lead to more growth and profit? Specificity is needed here, as investors awarding significant amounts of money will want to know exactly where that money is going, and how it contributes to their return on investment.

You also should be proportionate and realistic about the amount of funding you ask for. There’s no exact rule about how much funding to request, as it ultimately comes down to your planning, but you shouldn’t expect to waltz out of your first investment meeting with one million pounds. It’s speculative at the early stages, but you can come up with a good financial model that’s relevant to the type of investor you’re approaching if you take the time to look at the detail of your business. Seeking the guidance of a financial advisor is a good step to take here, as they’ll know the right questions to ask you.

When it comes to your business plan and financial model, sit down and spend a lot of time on these. This is why investors often prefer to back entrepreneurs who’ve already tried and failed, because they know the steps to take and the questions to ask themselves.

Read more from the Why Businesses Fail series:

 

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Pioneer Programme 2020: Meet the Finalists 

Meet the entrepreneurs in the running for the Best Business Pitch and Best Business Idea awards. Winners will be announced at a virtual ceremony in June. 

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As the government, businesses and individuals adapt to a “new normal” in the wake of COVID-19, the case for innovative thinking in the workplace has never been clearer. With this in mind, we’re delighted to introduce this year’s Pioneer Programme finalists.

Pioneer is an extra-curricular course for Birkbeck students looking to develop the knowledge and skills to excel as an entrepreneur. Over seven Saturday sessions, participants learn from a range of entrepreneurs, industry experts and each other to build the skills needed to develop their business idea or scale up an existing business. 

Representing the best entrepreneurial minds in Birkbeck, the finalists are in with a chance of winning either the Best Business Pitch or Best Business Idea award, each worth a £1000 cash prize to support their business, along with a bespoke package of mentoring, coaching and promotion. 

Participants’ achievements will be celebrated at a virtual awards ceremony on Thursday 18 June, with a panel of five independent judges, themselves entrepreneurs and industry leaders in start-ups and innovation. 

Meet the Finalists

Jody Halstead

Jody Halstead
MSc Management with Business Strategy and the Environment
Business: Circular Surrey 

My business, Circular Surrey, is a platform for local business leaders who want to transition to a low carbon circular economy. 

Research shows that more localised solutions are needed in order to make the shift to a low carbon circular economy. Alongside this, business owners and leaders often don’t have the resources to fully apply their time and need some additional support. 

The Purpose of Circular Surrey is to provide clear and tangible support for local businesses to enable them to shift to more sustainable business models and practices whilst continuing to power Surrey’s economy.

 

Alexander Flint Mitchell

Alexander Flint Mitchell 
MSc Business Innovation (specialising in Entrepreneurship) 
Business: Blind Cupid 

Blind Cupid is for people who want lasting love and are frustrated by the time and money wasted dating incompatible people. Blind Cupid offers fast, fail-safe matchmaking. Unlike eHarmony and Hinge, our product matches users with people who share the same values and fundamental way of thinking via a never-before-used science. This creates a fast-track to lasting love. Far from the superficiality of Tinder, profile compatibility is scored and bios are seen before a user chooses which of their matches to reveal photos to. This leads to better dating decision-making. 

You can take Blind Cupid’s ‘Sense of Life’ Questionnaire today and get a very informative report about who you fundamentally are as a person.

I am currently fundraising for Blind Cupid and the product should be on the market within the next three months. 

 

Picture of James Shepherd

James Shepherd 
MSc Cognitive Neuroscience and Neuropsychology 
Business: Smart Therapy Tools  

Smart Therapy Tools aims to modernise psychological therapy treatment by providing both therapists and service users with an interactive and engaging smart phone app.  

Cognitive Behavioural Therapy (CBT), a therapy based on a structured understanding of how mental health issues maintain themselves, is at the forefront of modern mental health treatments and the NHS alone aims to treat over 1.5 million people a year with this approach. To improve the experience of this therapy, I have developed a prototype smartphone app which brings important techniques away from static pen and paper approaches into a more engaging and dynamic domain.

In the future, I aim to put data science at the heart of the app by using statistical modelling to learn from user inputs. As the app is used more often, more information from the heart of the service user/therapist collaboration can be utilised to help understand the complexity of mental health problems and inform new treatments.

 

Picture of Kevin Tsai
Kevin Tsai 
MSc Innovation and Entrepreneurship 
Business: Anywhere Bear 

Anywhere Bear is a vision born from my passion for travelling. However, I have come to realise how damaging air travel is for the environment – even a short haul flight from London to Edinburgh contributes more CO2 to the atmosphere then an individual’s average annual emissions. 

My wife and I recently took a holiday around Italy without flying and we loved the experience of travelling around by train.  We then looked at other holidays around Europe but found it difficult to plan without flying. There is no one go-to site that we trust and find easy to use for our needs, hence the decision to pursue the idea of a travel platform specialising in helping holiday makers to plan and book their holiday around Europe without flying. We want to build a fun and engaged community of people who will enjoy sharing their travel stories and be able to challenge and inspire their network to join them as they go flight free.  

Due to COVID-19we’ve had to rethink our strategy, as we foresee travel being impacted by this pandemic.  We’re now going to be providing travel inspiration to places around the UK.  We plan to partner with eco-hotels and restaurants and build a platform to allow people to still enjoy their holidays with a minimal carbon footprint.  

Our plan is still at the ideation stage so watch this space as we reinvent the way people holiday!

 

Picture of Hetty Bonney-MercerHetty Bonney-Mercer 
BA Global Politics and International Relations 
Business: FemInStyle Africa 

In the near future, representation of women in Ghana’s politics will be higher, women in Africa will be more financially independent, women who have broken the glass ceiling in their respective fields will be the norm instead of the exception, solo female travel will be safer and gender activism will have reached new heights. 

Because in 2019, two gender activists decided that there weren’t enough publications in the country that really focused on amplifying women’s voices exclusively and in a positive way and decided to do something about it. 

FemInStyle Africa is a magazine for women by women which aims to encourage women to live their full potential. We have five columns dedicated to politics, gender activism, profiling working women, financial advice and travel and style: always written with women as the central focus. FemInStyle Africa aims to mobilise women to bring about lasting changes in the fight for gender equality. 

We are currently building our website, recruiting writers, and finalising our marketing plan with a view to launching in Q3 2020. We welcome you to be a part of our journey.

 

picture of Mukesh Bhatt

Mukesh Bhatt 
PhD Law 
Business: inSTEAD – integrating Space Technologies into the lives of the Elderly and Disabled 

 The inSTEAD project wants to re-purpose, re-innovate and re-invigorate space technologies, which can be used to help the elderly and disabled. Over 700 astronauts in space and returning to Earth are supported by a multi-billion-dollar industry, prototyping and patenting health support and rehabilitation mechanisms. The astronauts suffer from the same health problems as the elderly and disabled on Earth, and yet solutions for the latter are priced beyond their reach. However, anything used by astronauts can also be used by the elderly and disabled because each is human. 

Encouraged by the Birkbeck Pioneer programme, the International Space University and the European Space Agency at its Noordwijk business incubation centre, inSTEAD (AbleSpace Paradigms) aims to translate the hardware and psychological technologies and methods used for astronauts into a form suitable for the support and rehabilitation of the elderly and disabled on Earth. 

The inSTEAD project includes in its mission both commercial and philanthropic aims and objectives for high social impact and making the best use of opportunities for collaboration with national space, technology and development agencies and initiatives. It requires a team of dedicated and impassioned personnel to help make it a success. If you wish to become involved please contact Mukesh. 

Further Information: 

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Why businesses fail: customer acquisition strategy

Welcome to the Why businesses fail series. This is the third of five blogs that delve into the reasons for businesses failing and offering solutions. This series was launched by Lucy Robinson of Birkbeck Futures and Ghazala Zia from Windsor Swan. In this blog, they share how you can narrow down your customer and find an effective marketing strategy to attract and retain them.  

Lucy Robinson is the Employability Consultant for Business and Enterprise at Birkbeck Futures. She runs the Pioneer programme for aspiring and early-stage entrepreneurs and hosts an enterprise series on the #FuturesPodcast.

Ghazala Zia is a Venture Capital Advisor at Windsor Swan, a boutique London business advisory firm. She has an extensive legal background, and currently specialises in advising start-ups of all stages on funding, strategy and business analysis.

Once the product or service has been tested, it’s not enough to assume that it will speak for itself. Customers don’t come without being invited. It’s crucial to have a detailed customer acquisition strategy and a relevant, targeted marketing strategy alongside in order to succeed.

Firstly, define your customer. Not just ‘young women’ or ‘professional millennials’, but very specifically identified. Think about gender, age group, location, profession, and more. Similarly, your customer might not be an individual but a service provider themselves. You still need to be specific here. For example, if you want to sell to a university, who do you want to reach within the organisation? The students, the lectures, the staff? Knowing who your customers actually are is vital to the short- and long-term success of your start-up. Conducting market research tests on your intended audience is also a great way to measure if they actually want your product – often, you may be surprised by who your actual customers are.

At the early stages of a start-up, it’s wise to channel funds (even if they’re limited) into a solid marketing strategy. Test your consumer behaviour, determine advertising costs, and determine how many customers you’ll reach. Similarly, build up your brand reputation in order to garner recognition and ultimately, loyalty from your intended audience.

Customers show loyalty to authenticity, and your marketing should reflect a strong and consistent brand identity that is honest to the product itself. If you have a flashy marketing campaign but the product itself doesn’t hold up to scrutiny, you risk being slated online and by word of mouth. This is why the marketing strategy itself only holds up when the product does – which bring us back to the importance of understanding the problem you’re solving, and carrying out extensive testing on your intended audience.

Within your customer acquisition strategy, you should be familiar with certain metrics. How will you acquire your customers? What is your cost of acquisition? How much marketing do you need to spend to acquire one customer? How are you going to retain that customer?

Read about how to identify a need in the market and attract investors in the first two blogs of the series.

 

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Why businesses fail: Being unattractive to investors

Welcome to Why businesses fail, the second of five blogs that delves into the reasons for businesses failing and offering solutions. This series was launched by Lucy Robinson of Birkbeck Futures and Ghazala Zia from Windsor Swan. In this blog, they share some practical tips to get investors to demonstrate traction in your business and attract potential investors.

Lucy Robinson is the Employability Consultant for Business and Enterprise at Birkbeck Futures. She runs the Pioneer programme for aspiring and early-stage entrepreneurs and hosts an enterprise series on the #FuturesPodcast.

Ghazala Zia is a Venture Capital Advisor at Windsor Swan, a boutique London business advisory firm. She has an extensive legal background and currently specialises in advising start-ups of all stages on funding, strategy and business analysis.

Being unattractive to investors is a primary reason why some start-ups fail, and there’s a few pitfalls to avoid here. One big one is not showing traction.

Having a strong and evidenced market need for your product or service is the best way to demonstrate traction. By traction, we don’t mean a few thousand likes or free users – that’s not enough for an investor. It needs to be clear that this engagement is converting into paying customers, which is a trackable and easily identifiable metric. Engagement without custom isn’t traction or validation of your product. It could be a sign that you’ve got great marketing or that you’ve got a particularly active customer base, but if they’re not actually buying your product it suggests they don’t really need it.

One metric you should always know as part of your financial model is how many customers you need to stay viable. Before you start pouring hours into creating content, or spending time and money adding new features to your product, ask yourself: “What value am I adding?”. If the effort, energy and resources you use won’t actually convert to more sales, you should consider if it’s really necessary.

Investors vary with the level of traction they’d like to see, and different types of investors look for different amounts. For example, if you’re an early-stage start-up you’re likely looking at individual investors like Angels. Angels want to get involved at an early stage and take a punt on your business, if they see something in you. At a later stage, when you’re in revenue, you might use Seed Investors. Seed Investors get involved when you can demonstrate more growth that they want to get on board with. Generally speaking, investors want to make ten times return on their investment. This means you need to demonstrate traction which suggests they’ll be able to achieve this by investing in you.

Further information:

 

 

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Why businesses fail: Identifying market need

Welcome to Why businesses fail, five blogs that delve into the reasons why businesses fail and offering solutions. This series was launched by Lucy Robinson of Birkbeck Futures and Ghazala Zia from Windsor Swan.

Lucy Robinson is the Employability Consultant for Business and Enterprise at Birkbeck Futures. She runs the Pioneer programme for aspiring and early-stage entrepreneurs and hosts an enterprise series on the #FuturesPodcast.

Ghazala Zia is a Venture Capital Advisor at Windsor Swan, a boutique London business advisory firm. She has an extensive legal background and currently specialises in advising start-ups of all stages on funding, strategy and business analysis.

According to CB Insights in their 2019 update on a post-mortem of over 300 failed start-ups, “No Market Need” is the most common and significant reason for young business failure. A start-up can have the best team and a truly great product, but it can still fail if no customers need it.

The key mistake here is entrepreneurs going straight into their solution, and basing that solution on a perceived problem rooted in their own assumptions. In short, not properly identifying the problem they’re actually solving. Basing a business idea on untested and often biased assumptions is the quickest way for a product to fail.

Without a real problem to solve, the product won’t be offering a solution that customers want to buy. Without customers, sales won’t come. Without sales, a product will have no traction. Finally, without traction, investors won’t touch the business with a 10-foot pole.

Luckily, this is a failure that can be avoided by putting in the right work at an early stage. The three most important things an entrepreneur can do at the ideation stage of their business? Test, test, and test again!

A good way to start testing is through surveys, from which you can get an idea of your intended audience’s perceptions and priorities. Following this, you can create a beta version or prototype – this is your MVP (Minimum Viable Product). With this, start with just one or two features so you know exactly what you’re measuring a reaction to. Once you’ve got your MVP, consider offering the product or service for free to some users to gather feedback, data and insights.

Always be focusing on moving towards paid users, but don’t discount the value of free users for the valuable insights you can gain. Once you’ve got the data you need on your customer-base, it should be clear what problem your business is solving. Free users give you insight, paid users give you traction.

In short: don’t assume the way you experience a problem is the same as the way everyone experiences it. Test it objectively.

 

This is the first in the Why Businesses Fail series. Come back next week to find out how to appeal to investors.

Further information:

 

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What is intrapreneurship and how can it help your career?

The life of an entrepreneur isn’t for everyone, but you can still reap the career benefits by embracing an enterprising spirit in the workplace.

Brainstorming, Business, Cheerful, Clap Hands

I don’t know about you, but a pretty clear picture springs to mind when I hear the word entrepreneur: suited and booted, firm handshake, these are the people who can talk to anyone, are interested in everything and have a remarkably persuasive knack of bringing people on board with their ideas.

While the risk-averse among us may want to steer clear of the career path of an entrepreneur, you might be surprised at how much there is to gain from embracing an entrepreneurial spirit from within an organisation.

That’s where intrapreneurs come in.

What is intrapreneurship?

Intrapreneurship involves developing the skills and mindset of an entrepreneur, but using these to benefit the company you currently work in, rather than starting up your own business.

Intrapreneurs are recognisable in organisations as the people who are confident, question how things are done and are willing to try new approaches in search of better outcomes.

What’s in it for you?

Adopting an enterprising attitude in the workplace might sound like a lot of hard work, but it’s a smart career move. Putting forward suggestions and championing new ideas allows you to put more of your own personality and interest into your role, making it ultimately more satisfying. We also know that increased autonomy at work is one of the keys to staying motivated.

Entrepreneurship develops skills that are transferable in any workplace, such as emotional intelligence, innovative thinking and leadership. Plus, any suggestions that you make and work on can be used as concrete examples of your achievements when you’re looking for your next opportunity.

What’s in it for your employer?

Although the concept of intrapreneurship has been around since the 70s, it’s becoming increasingly relevant in today’s world. Creative thinking, emotional intelligence and the ability to embrace and adapt to change, all key skills of an entrepreneur, are becoming essential in the modern workplace and are where humans differentiate themselves from artificial intelligence.

Employers value team members who are proactive, resilient and who can offer creative solutions to the challenges their business is facing.

Enterprise at Birkbeck

At Birkbeck, there are many ways to get involved with enterprise to suit any level of ability and time commitment.

  • Pioneer

Pioneer is a fantastic way to launch your enterprise journey, and applications for this year’s programme are now open. Birkbeck’s flagship enterprise course is open to Birkbeck students and recent graduates from any discipline who are looking to develop their entrepreneurial skills.

  • Workshops and Events

Birkbeck Futures host events throughout the year focusing on a different aspect of enterprise.

  • Courses in Enterprise

Birkbeck’s School of Business, Economics and Informatics has a strong reputation for research excellence and innovation and offers a range of programmes where students can prepare themselves for the modern workplace.

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Birkbeck students launch Mammalo – the new “Uber” for on-demand services.

Former Birkbeck students teamed up to start Mammalo – a startup that connects London’s population to hundreds of verified industry professionals.  

Maxime van den Berg, former MSc Management with Business Strategy and the Environment student, and Andrea Armanni were just as eager as many students here at Birkbeck to start their own company. During their studies, they found the time to plan and implement a brand new idea known today as Mammalo.

As a quick introduction, Mammalo is an online marketplace to quickly search and book any professional services. Conversely, if you have any skills that you want to make money out of, you can create a personal profile and list your skill in order to get exposure to people looking for your service.

According to Andrea, “Mammalo is truly a revolutionary platform that we would like to scale globally someday. Until then we are focusing on the expansion here in London and the rest of the UK.”

Starting a business is tough, and Maxime and Andrea recognise the importance of having others to support them on their start-up journey. They are getting involved with Birkbeck’s Enterprise Pathways to give back to fellow Birkbeck students and encourage them to support each other as much as possible. As we learned from them, to be able to start a business you only really need three things:

  1. An idea
  2. A plan
  3. The knowhow

An idea is only 10% of the solution; the execution will determine your success. Carefully consider your business model and competition. Failing to plan is planning to fail, after all.

Lastly, knowhow encompasses what you have learned in university, in the workplace and in life. You need to have some basic knowledge to get a company physically started. If you don’t have this knowledge, be curious! There is always room to learn to do what you cannot today.

Maxime mentioned “The thrill of not knowing what will happen but putting in as much effort as possible to make the best come true is what got us started and keeps us going. Not only are we solving an issue for everyone in London but we also get to build the solution from the ground up.”

This is an example of a success story in which students have used the knowledge they have gained to pursue a dream of starting their own company.

So, if you have some time feel free to check out the platform on www.mammalo.com and signup today! They can use all the feedback they can get and would hugely appreciate your thoughts.

Maxime will be coming to Birkbeck to share his start-up story soon – look out for the event details when they go live here.

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