Tag Archives: entrepreneurship

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.

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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.

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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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Community: The Mother of Invention

This post was contributed by Matthew Jayes, Business Development, Communication and Enterprise Manager in the School of Business, Economics and Informatics

A report into student entrepreneurship compiled by Public and Corporate Economic Consultants (PACEC) identified independence and flexibility of self-employment as the major pull for graduates to seize the opportunity to become their own bosses. But from what or from whom do they gain independence? Does workplace employability restrict flexibility, despite the right to request flexible working?

Most responsible businesses communicate their impact on their respective environment, stakeholders and employees. How, then, should universities frame the concept of student entrepreneurship? Negatively, as the freedom from external restraint on the individual’s actions; or positively, as the ability of an individual to act upon free will, providing the outcome does not harm others?

enterprise-300pxwIn all likelihood, it remains the role of the university to clearly articulate the known options and help students to navigate their chosen path. For this reason, Birkbeck offers unique support to students interested in developing new ideas (Enterprise), and new businesses (Entrepreneurship), in the form of Enterprise Pathways. Many Birkbeck students have commitments beyond their study, in the form of work, care, societies or volunteering. To accommodate these constraints the pathways on offer allow different students to engage in different ways, from a variety of starting points.

Every academic year, we offer the Boot Camp pathway, which brings together students from different organisations to work in small groups to develop new ideas on a given theme. The autumn 2016 Boot Camp will be held at Runway East in partnership with Central Saint Martins, University of the Arts London, Goldsmiths, University of London, and Sotheby’s Institute of Art, London. The theme is Future of Media and will be facilitated by invited guests such as Kirsty Styles, Programme Lead, Talent and Skills, Tech North.

Students interested in a longer path have joined the Birkbeck Enterprise Community, Competitions and Awards (BECCA) course, running from November to July. These students, from various courses at Birkbeck, build networks and develop their ideas as part of a supportive community augmented by external facilitators. The first session in November 2016 featured Damola Timeyin, Strategist, BBH London, leading the Saturday morning meeting on “Creativity”, where he urged the audience to fully embrace diverse opportunities, experiences and communities.

The first BECCA session

The first BECCA session

Birkbeck students hoping to develop ideas independently are encouraged to follow the digital pathways online. Simply Do Ideas offers an online idea testing tool, through which students can directly access support from the Enterprise Pathways team. Enterprise Pathways has also partnered with The Digital Garage from Google – a digital skills training platform assisting students to grow their business, career and confidence.

So –where do these pathways lead? Each has its own distinctive outcome; however by forming a strong community and deep understanding of our students, Enterprise Pathways helps to map a bespoke route to future destinations. At the heart of London, a global creative city, we help our students to identify what could enhance their enterprise journey. Enterprise Pathways empower Birkbeck students to make a positive impact on society by thinking differently.

Notes

  • Places for Birkbeck students at the Future of Media Boot Camp have now been allocated, however please email Enterprise Pathways to join the waiting list.
  • The full BECCA programme is available online. While the course is at capacity, interested students should contact Matthew at the earliest opportunity.
  • Links to Simply Do Ideas and The Digital Garage from Google are for enrolled students only, available on the Enterprise Pathways website.

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A Time for Entrepreneurs

Andrew Atter, Birkbeck’s Entrepreneur-in-Residence, writes about the current opportunities for entrepreneurship in London.

As we draw to an end of Global Enterpreneurship Week, you might be forgiven for being overwhelmed by all the hype. Everywhere you look there are conferences and workshops. President Clinton delivers his key note speech at Entrepreneurs 2012 today. And, as you flick through papers, millionaires promise to share their secrets of success. Who said there’s no free lunch!

What does all this mean?

Well, behind the entire buzz, is a very serious point. As anyone who has seen the expression on Mervyn King’s face will have realized, as a society we face years of stagnation and low growth.

This means for students and alumni, work opportunities, job prospects and career growth through traditional corporate structures will be far more limited than in the past. As both an economy, and as individuals, we will all need to access new markets and create new products and services. This is what Entrepreneurs do: they take initiatives that create wealth and opportunity, for themselves and the society around them.

Looked at through the lens of an entrepreneur, the conditions for starting new businesses are good. According to the FT, new company formations rose by 2% last year, and HEFCE report that knowledge transfer from universities increased by 7% in 2010-11. The UK economy overall might be stagnant, but that is not true for London, and certainly not true for the M11 and M40 corridors linking London to Cambridge and Oxford.

Entrepreneurs with sharp business plans, focused on early sales growth, can get funding. And, the good news is that businesses formed in recession tend to be leaner, meaner and more sustainable that fanciful creations funded by bank debt in boom times. I speak from experience.  A business I founded in the post dot.com crash is still going strong, whereas a business launched at the peak in 2007 became an out of control, over complicated monster, and had to have the plug pulled out.

So, beware of the hype generated by charlatans and snake oil salesman, but also don’t be out off by the Mervyn Kings of the world.

Birkbeck students are situated at the nexus of the greatest concentration of financial, technical and creative resources on the planet, in one of the world’s most entrepreneurial societies. To prove it, next time you have a Dhall Curry at the farmers market in Torrington Square, just reflect on the simple fact that someone put the formula Students+Curry+Lunch = Opportunity together before you did. In other words, someone ate your lunch.

To avoid that happening again, simply join the Birkbeck Enterprise Hub (aka Starts Hub), join a Coaching Seminar, attend a CEO Workshop, and start making things happen for yourself and those around you!

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