Entrepreneur and carwow founder James Hind looks back at the early days of his startup – and shares his tips for avoiding some of the more common pitfalls
In the early days at carwow, we realised we were bursting at the seams and needed a larger office space. Though it all worked out and we were able to spill over onto another floor in the same building, the experience illustrates one of the most common teething problems a tech startup can face: growing too fast, too soon. Hiccups like this are bound to happen as you’re getting on your feet but many of them can be planned for – or at least overcome relatively easily.
Find the right fit
Being able to grow your team at the right pace and knowing when to take on your next member of staff is something many startups struggle with. This is particularly true for tech startups because there can be so many elements that require different types of talent. But if you rush the hiring process, you risk taking huge backwards steps and burning through more money in wages than your business is making.
Avoiding debt at all costs as a young business is very important. But recruiting in a rush can also be counterproductive, as you might end up settling for someone who really isn't right for the role. In the long run, this could have an impact on how quickly you’re able to grow.
Plan your finances
Running out of cash early on is more common than you might imagine. I launched carwow with my own savings but it wasn't long before I was exploring my other options. At first, I looked at angel investment and a little while later sought funding from some big venture capital firms. We've been lucky enough to raise over £18m worth in investment funds, which has been instrumental to carwow's growth. I'd recommend that any tech entrepreneur at least considers a similar route once they've put their money where their mouth is and invested their own capital in the company. Burning through all your money before your business is making any isn't a position you want to find yourself in, so take things slowly at first.
Don’t let being cautious about growing too fast make you think too small though. So many people fall into the trap of not building their business as though it's going to take off and become something bigger. This is a rookie error and one that can be costly. From having the right infrastructure in place to having a solid supply chain that can support your growth, tech startups need to be built for bigger things from the outset.
Craft a brand
At the same time, it's important to dedicate yourself to crafting a strong, trustworthy brand that wins over your customers. Word of mouth will only get you so far in 2016 and brand awareness is very much a pay-to-play game. Even if funds are tight, this isn't an area to scrimp on. It’s worth investing in researching your target market, as the information you glean will enable you to reach it more cost effectively. At carwow, we’ve probably benefitted most from digital marketing, SEO-driven campaigns and TV advertising – which has been one of our more recent investments. Some simple and cheap online PR can also be a great way to start getting your name out there so that people start to recognise and remember your brand.
Lean on your team
You won't truly realise how good or bad you are at multitasking until you launch your own business. You will have more balls to juggle and you will have to learn to get used to the fact that you'll be spread more thinly. I've learned that it's OK to say "no" or delegate sometimes.
While you can never plan for every eventuality, it helps to learn from the experience of other entrepreneurs in the tech space who have been there already. The heady early days can be full of excitement but it’s OK to take things at your own pace.