Many people claim to have great ideas for businesses, but only a few ever become a reality. Even fewer become successful. So what is the secret to success? What makes some people successful entrepreneurs while others fail to get out the starting blocks?
Having built my own business – LUMO, an e-commerce shop merging fashion-forward city cycling clothing and accessories with waterproof LED technology – I’ve learned a few things about what makes a successful startup.
Start with a compelling vision
Most great startups succeed because they’re built on a clear vision that helps solve a real problem. Everything we’ve done at LUMO is about making city cycling safer and more stylish; a cause we passionately believe in.
LUMO was set up after my partner Doug was knocked off his bike for the second time. The driver of the car apologised saying he hadn’t seen him on the road in his dark jacket and jeans, yet Doug was too vain to switch what he was wearing for high vis clothing.
We both loved cycling but were becoming increasingly aware of the dangers on our commute. We decided to make clothing that looked great without a bike, but would also be visible to traffic while on one.
Until now, high quality cycling wear has largely been targeted at weekend warriors. We wanted to change that and make beautiful garments that are designed for city riding and living.
TED Talks and listening to the stories of other entrepreneurs can help guide your vision.
However, if your idea isn’t something you can see yourself working on for the next twenty or so years, it’s probably not the right one for you. So if you’re thinking about a career as an entrepreneur, think long and hard about what you’re passionate about; what you love doing in your everyday life and how these things can be improved.
Test the concept
Once you’ve had a great idea, you need to make sure it’s an idea that people will buy.
Testing and validating is a vital part of the process and one that’s never been easier thanks to crowdfunding.
It was only when we put LUMO on Kickstarter that we knew we were really onto something. Not only were we able to see there was a large and committed customer base in the making, but by crowdfunding we were also able to get the money we needed to build prototypes and get the business off the ground.
Perhaps most importantly, our 458 backers all provided us with invaluable feedback on our designs. Having access to opinions from 32 different countries meant that we were able to test and amend our designs as we went along. This ensured that our end products were appealing to our target audience, an ideal outcome for any startup.
Before putting pen to paper to start the designs, we also read hundreds of product reviews and met with respected urban cycling retailers, designers and journalists. We did this to make sure we knew exactly what was important to include in our products from a business perspective.
Just do it
Plenty of people will be able to come up with a great idea based on a great insight and on a subject they’re passionate about. But, even then, some ideas will never see the light of day.
Often this is because it’s all too easy to procrastinate; to stick with the day job and keep your startup dream as just that: a dream. If you have a great idea that you believe will work, take the plunge.
That said, I know first-hand how difficult it can be to make this decision and stick to it when times get tough.
July 2015 was the month Doug and I chose to complete the production of our jackets and backpacks, raise an equity investment round on Crowdcube, get our website and marketing assets ready to launch and get married. No biggie then.
We passed our funding target three days before our wedding. Then, the day before our wedding, we were told that some of our raw materials had been held, meaning we were going to miss our production slot just before the factory went on summer shutdown. Devastatingly, this would mean we would miss our launch date.
After much toing and froing, and frantically ordering replacement materials (having conversations with magnet suppliers while arranging flowers was a particularly surreal moment), we eventually managed to get everything out on schedule. This wouldn’t have happened without the amazing help from our factory, which stayed open a week longer than it planned to.
This experience taught me that there will never be a perfect moment to launch a new business – you just need to do it and balance priorities and cash flow as best you can.
Search out government funding
Crowfunding and equity investments are two ways that startups can secure funding. There is another that shouldn’t be overlooked – government funding. Government funding schemes, such as Innovate UK, can help grow your business – as long as you don’t mind filling out paperwork!
LUMO, for example, secured an Innovation Voucher from government scheme Innovate UK which helped us with early prototyping. As well as these bigger grants, you should also consider regional funds based on where your business is located. As well as our Innovation Voucher, we were able to get Business Growth Grant from Coast to Capital – a local enterprise partnership.
Numerous studies, including Telefónica’s soon-to-launch Index on Digital Life, show that digital entrepreneurialism is a key factor to driving stronger economic growth. These grants demonstrate that governments recognise this and are willing to support startups looking to grow.
Take advantage of this support where and when you can.
The word ‘entrepreneur’ is loaded with associations. One of the most misleading ones is that the entrepreneur is something of a lone wolf, getting on with things on their own.
You won’t be an expert at everything, so work hard to find people who are and who can help bring your ideas to reality – be it manufacturers, designers or web developers.
As a startup, this involves smart thinking: use your personal networks to find partners and build up personal contacts so you can talk people through your ideas and inspire them to help you.
If your partners are as enthusiastic about your business as you are, they will be more willing to go the extra mile for you.
Lean on industry experts
Finally, it’s key to get as much information on the industry you’re entering as possible to help you grow your business. You need to find an industry expert to provide unbiased opinion on your ideas and business model.
Whether you find this expert through your personal networks, or by speaking to journalists, a second opinion is always useful.
We were lucky enough to get advice from Emily Brooke, who developed Blaze bike lights. Her business had gone through a similar process to the one ours was going through and her advice was invaluable to us, particularly for crowdfunding.
These are just some of the tips I’ve picked up while turning my own dream business into a reality. Hopefully, reflecting on these can also help you on your own path to business success.
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This post was brought to you by Telefónica.