In the latest Elite Business Live session, Oli Barrett spoke to Andrea Reynolds, founder and CEO of Swoop funding; Michael Hayman, Chair & Co-Founder, Seven Hills; Lara Morgan, founder Pacific Direct and Piers Linney founder of Moblox and former Dragon’s Den dragon.
It was a panel chock-a-block with experience of developing a business from scratch, finding and securing investment and, of course, familiarity with the usual slings and arrows that all business leaders face along the path to success and/or failure.
And the key theme was about making the right decisions at the right time. Knowing when to expand, when to seek investment and how and when and how to pivot away from something that might not be working, in a way that provides continuity and a future for your business.
Piers Linney kicked off proceedings with his take on when it is the right time to bootstrap your business going forward and when to look for investment
“How far can I take it before I go and raise any money whatsoever? Simple as that. Don’t really sign on until you absolutely have to. But when you realise you do have to, don’t start too late. Especially with equity. Make sure you can have as much of your business for as long as possible.”
Lara Morgan has been on the other side of the table, as someone that has invested in countless companies and had some advice for those that will be sitting in front of potential investors.
“I’ve thought about this a lot and I keep coming back to my gut feel because it doesn’t let me down. And within that I usually kind of come up with a one word. What do I think about this person as they’re starting to talk to me? And if I find the word ‘trust’ somewhere in my description, then I think that’s a great starting point. Can I trust this person? Because I think you have to believe when you’re investing that you’re going to get told the whole story and not in part.”
And if you’re not good in the room, and face to face negotiation is not your strength, unfortunately Morgan has little sympathy for you.
“Practice. It’s not an excuse. I’m afraid it’s tough shit. You’ve got to go out and ask for the money. And women are terrifically bad at this. If you don’t keep begging, you’re not going to get it, so beg in a constructive, planned way.”
Like all on the panel, Morgan had some shareable teachings, or war stories as they were referred to.
“I started my first business when I was 23,” she said. “I had no plan, no clue, no skills, did a bit of math – that was very helpful- and actually, I tried to be all things to everybody. And it’s an absolute terminal disease, that people say yes to too much and no not enough.
“I used to sell toiletries to hotels, Travelodges and everyone. My first customer was the Dorchester. What a doughnut. I tried to then supply everybody.
“You start off with an idea and you’ve got to stay focused, and you’re going to have to establish some agility to move with the market. I mean, recently I’ve got a pocket-sized spa brand that actually started as a much bigger one. But now we’ve made it pocket sized. We’re innovating. We went into COVID as a spa company, we’re coming out of over COVID as an intended FMCG company.
“But stay focused on the primary delivery that you intended to do and value your time like nobody’s business, because you can be busy for hours all day and learning to delegate all of those things will complement your skill set and growth.”
Without a support network it is easy to become insular and not be able to see the bigger picture said Piers Linney. Being able to rely on another point of view when it comes to the direction of your business is a valuable range finder.
“You have got to stay objective. It’s a business and approach it that way. You can’t be too attached to it because it’s your baby, your hobbies, your ambition, and that’s why you need to have external governance. Mentors, non-execs whatever you want to call them. People, even your friends actually, that know who you are and know what you’re trying to do. Outside external views of what you’re trying to do.”
Case in point, Linney has pivoted his business in a different direction from the one it set out on.
“Well, most startups do at some point. So we started in basic technology, as a mobile phone platform, and we’re pivoting away from that now and moving completely more towards helping small businesses focus on understanding artificial intelligence, and real next-gen technology.”
Swoop Funding founder, Andrea Reynolds, also had to evolve both her business and her role within it.
“I knew my customer. I knew how to get them finance. I knew the market. I wasn’t a technologist. I wasn’t an engineer. So I went down a lot of expensive cul de sacs with development agencies, etc. But I would say don’t be discouraged if you’re not an engineer. I had to learn my way through it so that I could keep them accountable.
“For me when I started, I wanted to help every business directly. And then I quickly learned it’s going to take a long time if we’re going to grab the attention of every small business owner. So we actually built our technology to embed it within other brands like Nat West. So accountants have it now, banks have it now, and that was me letting go of always wanting to be the one with the relationship, but actually, that’s changed our business completely.”
Even business consultants don’t have all the answers, said Seven Hills founder, Michael Hayman. But knowing that, is a key skill in itself.
“I suppose Netflix is your ultimate example. It started off life thinking it was going to be a mail order DVD business, and has become the digital giant that we see today. And I suppose it’s about knowing your moments. His moment was being rejected by Blockbuster, ironically, and that actually inspired its digital drive.
“The thing about staying on point but also knowing when you’re failing, is what makes this game so difficult, right? Because there are moments where actually, drive and determination is a good thing, but there are also the points in time where, you know, the game is up, right? You need to move on, you need to change and I think that is the really hard point on judgement.
“What I would say, though, is that I assumed that I was going into a world which was about a world of answers, you know, being a consultant. It’s actually about good questions. Questioning yourselves on a great many things, from what you do to your own behaviour to the way that actually you evolve in life is a really important part because I think everybody assumes that because you’ve founded a business because you’re at the helm, that you’ve got all the answers. Start with the fact it is not true. But you can ask very, very good questions.”