Neil Lewis - Innovative Entrepreneur

Solving problems by growing profitable businesses @neil_lewis

Time to startup? Is now the perfect time for freelancers to launch startups?

It was a summer like this one – only twelve years ago, that I sat on a beach reading… and reading…

… and that lead directly to my first startup, in 1999 – an ebook publishing business.

Back in 1999, I was reading about Bill Gates of Microsoft, whereas, now, we read about Steve Jobs or Steve Blank or perhaps Lord Sugar.

It seems a millenium ago that the great internet business rush really got going. And, of course it is!

So, as I sit runing through my summer reading, VC reports, Nesta research document, ‘Be Unreasonable’ by Paul Lemberg, and so on, it is has got me thinking about two things

Firstly, should more people engage in startups? And if so, who are the right people to start startup businesses?

Secondly, how is the startup scene different now from when I first began 12 years ago?

How today’s startup scene is different.

1. The venture capital industry in the UK is well developed. Back in 1999, most VC funds were either a Silicon Valley or a London / Capital city based fund. Today, we have numerous regional funds.

Equally, whilst VC money has halved in the past four years, there is still much more available than in 1999. Or at least, smaller amounts are available to many more businesses.

2. Business Angels investing and very early stage investment is now a clearly defined concept and the angels are out there – if you can find and convince them!

3. The UK is awash with government funded events around startups – but this is going to disappear. Public money backing startups has always been an odd idea, and the remaining regional development cash will now be spent on existing SMEs that are growing.

This isn’t a bad thing, as the returns from all the ‘entrepreneur events’ have been very low in terms of measurable ROI – albeit, that they made being a startup entrepreneur sexy and desirable job title!

4. VC money is now available in much smaller chunks – with more funding available at various milestones. Many funds are very clear about where they want to invest the money. The hot sectors are digital (including media), biomedical and alternative energy. Some money is available for food and transport too. Outside these sectors, there is very little venture capital money, only bank loans backed by owners’ personal assets.

5. Venture capital money now only backs great teams – a good idea isn’t enough.

6. Lastly, we are beginning to see the rise of the business accelerator – see this list of European based business accelerators – which is beginning to increase the flow of good ideas into high potential businesses.

So, the startup scene is much richer than before, but who should launch a startup?

Who should launch a startup?

1. Remember, it is the team (or talent) that makes a startup successful, very rarely is the idea good enough to succeed without a great team.

2. A great team needs time to become a great team – it isn’t an instant process, but takes a series of collective experiences to learn how to overcome challenges, together.

3. Great teams need three things – founders or inventors, commercial or marketing / sales people and business leadership or experience. If any of these are missing (and it take time to fill those roles) than your team is going to be weak.

4. Hence, just as you develop your product and idea, so you should spend as much time developing the team – and of course, exposing both the team and the idea to your market, all at the same time!

5. Startups need mentally flexible minds which can cope with combining these three factors all at once – idea, team and market, whilst also being able to focus on what each team member is best at (and conversely, allowing the other team members to focus on what they do best, too).

Can freelancers make great startup  teams?

Yes!

Consider for a moment the life of a freelancer – multiple clients, multiple jobs – sometimes working with fellow freelancers, to deliver those different tasks on time and on budget at the right level of quality.

Equally, the experience of pitching for work is a massive benefit. Freelancers have overcome their fear of asking and / or selling. This means that the product prototypes should reach market much faster.

Freelancers are also, in my experience, pretty good at understanding what they can do best and what they are better off leaving to other people. Not many corporate employees have this skill, as they tend to believe they must do or control everything – as traditionally your degree of importance in a corporate company is the number of employees you manage.

So, what shall we do?

Twelve years ago I set up to build a 5m GBP business – and we did this.

This time, let’s build 10 startups that develop their idea, teams and raise finance (if necessary) and successfully launch.

How about we do this in the next 4 months?

Want to join me in one of these teams? I’m running a startup workshop on the 15th September in Manchester…. you can book tickets here

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Written by Editor on August 2, 2011 and filed in Entrepreneurs, Events, Featured, Freelance Jobs, Innovative Entrepreneur, Opinion , , , ,


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