December 7, 2018, by Carla Froggatt
Launching a Start-Up: What You Need to Know
By Michael Millar, BSc Economics (2008)
It’s thrilling to be at the cutting edge of development and innovation, and we hear about so many start-up success stories that many feel it’s an exciting fast-track to success.
The reality can be a little different. Around 90% of start-ups fail. Those that succeed do so because they share a number of qualities – from resilience to acute business savviness. But sometimes, resilient, business savvy start-ups fail too. This suggests that luck also plays a huge role in determining whether start-ups sink or swim.
In 2008, I graduated from Nottingham University with a BSc in Economics. After that, I joined KPMG on a graduate scheme before moving into private equity and then founded hoppist, a London craft beer subscription box in 2017.
Getting hoppist up and running has been a monumental challenge – very trying, but very rewarding. It’s been a constant learning experience, and there are a few things that could have been helpful to know before I started.
You need a really good idea
The number one reason why most start-ups fail? Because they make a product that nobody wants, or a service that nobody needs.
It’s not easy to spot a gap in the market. A good place to start is to see if you can draw from your passions. You know a lot about the stuff you really care about. You know the sort of things that you’d like to see, and the sort of things that frustrate you about what’s currently available. A good starting point for a new product or service is something that you wish existed.
I like craft beer, and I love discovering new beers and breweries near where I live. However, I always felt like I would have to spend half my life traipsing across the city to keep on top of all the great new beers out there. Hoppist is simply an easy way of helping people to discover the amazing variety of London’s craft breweries by bringing new beers and new breweries to our customers’ doors.
I was discussing food delivery boxes with a friend when I realised you could do the same thing with beer to make discovering local breweries much easier. Fleshing out this idea into an actual product and running some numbers came soon after. If you’re trying to come up with a new start-up idea, think long and hard about your passions. Is there anything you’d like to see? Is there anything irritating or limiting about what’s currently out there? The market research and feasibility studies can come later. If you’re addressing a real pain-point with your idea, then you know you’re on the right track.
One thing to remember though: if your start-up’s going to be a lasting success, your idea needs to be scalable. Your offering needs to be able to grow with your company, otherwise your growth might be unsustainable. That doesn’t mean everything you do must be scalable, but you should at least have an eye on how your idea could grow.
You need to be prepared to work hard
Of course it takes hard work to get your start-up off the ground. But few seem to realise just how much hard work it takes.
The biggest challenge for many might be the discipline you need to be your own boss. You need to be able to effectively manage your own time, even through some really menial work – of which there is a lot to get through when starting something from scratch! And knowing that there’s nobody standing over you can be liberating, but also terrifying. Yes, there’s nobody telling you what to do. But that also means that there’s nobody to guide you and support you through those particularly challenging periods.
When it comes to the skills needed to run a business, my degree and career background prepared me quite well for the finance and commercial aspects of the role. But there were still many, many challenges waiting for me. I had no idea, for instance, just how specialised a skill marketing is, and how difficult it can be to pull it off.
Get some experience
If you have a great idea, and if you feel you have innate business nous, then you might think that you’ll be able to launch your start-up the moment you graduate – if not sooner.
It’s not impossible that you’ll succeed if you do this, and I’m sure there are plenty of people that have managed to do it. However, there are many general skills from the working world that you are unlikely to have picked up yet, and you may not have built a helpful network of skilled and knowledgeable individuals to lean on. So before you go with your start-up plan, my advice is to spend a bit of time in business and finance, whether that’s working for somebody else’s fast-growing company or in a more conventional graduate scheme.
Yes, attempting to get a start-up off the ground is its own education. But you can’t beat seeing how an established, successful business runs from the inside. In time, you’ll be able to learn about a whole range of things that makes businesses of different kinds tick.
Wherever you end up, stay curious and ask lots of questions. Keep looking for new experiences. Get into the habit of doing things that scare you. Yes, many start-ups need luck to succeed. But with the right attitude, some good experience and a very good idea, you might be able to make your own luck.