In some senses, this post is a part II to raising finance for your business. Tuesday’s TechCrunch Geek n Rolla event brought together business start up hopefuls and experienced old hands from around Europe. The passion and enthusiasm of TechCrunch’s Mike Butcher in supporting the European start up scene is a joy to see. The scene needs more of that.
Update: Mike has other talents too, as we found out at the after party (thanks to @Itamarl for the video):
Here are the highlights and key take-aways from the event, at least the ones that caught my ear:
Andrew, of Huddle, gave an invaluable talk on “Hiring a group of peers” with points that are good ancient valley hiring wisdom:
- Have 100% agreement on hiring decisions – if anyone is in doubt, best to say no, and say no early.
- If in doubt, don’t hire – however tempting.
- Personal referral beats all other forms of hiring, by a mile, even finding people via Twitter.
- If you have to use recruiters, pick just one or two to work with, and build a quality relationship.
- Paying below market rate is a false economy, people will come and steal your good staff.
- You don’t always get the right team in the first place. Get over it.
- Follow the correct procedures – make sure you have staff trained in HR, the ROI is compelling.
Andrew talked about Huddle’s desire to create “a place I’d want to work at” :- great people + nice surroundings = WIN. Hard to argue with that! Reminds me of an old post from a Mike Smith on startups and hiring. It is so important and so hard to get right.
I’ve written a separate post on Joe Drumgoole’s “get off of my cloud” – it is good to see the topic of cloud computing for start ups getting some air time, done right it is a brilliant success-based cost model.
Joe Stepniewski, Skimlinks, talked about monetisation for start ups – I can’t seem to find that word in my spell checker… Revenues perhaps? ;). Joe reminded the audience that CPM has taken a 6% drop in the last year, but performance marketing has gone up. The changing numbers and dynamics mean that ad-funded start ups need to paddle faster just to stay where they were. You need lots of traffic. Lots – A million impressions a month is needed just to cover the cost of a desk in London (about £500/month).
The lesson? Don’t rely on advertising – CPMs are the lowest they have been for years, and dropping. Go direct (if you are going to go with advertising) and look for monthly tenancy from targeted sponsors. Choose ones that you are passsionate about and create interative promotions where the audience participate. A note to marketing managers and businesses looking for promotion: There is huge opportunity for you here. SAP and others have done very well off of sponsoring blogs.
Joe strongly encouraged start ups to look at affiliate schemes, which I’d hope he would, given Skimlinks business. They have low barriers to entry, are quick to get going, and work with lower traffic volumes. It is also a more level playing field, as small sites can get the same deals as larger ones. Social Media and user generated content can convert well, since user opinions and recommendation drive the buying decision. Forums and Twitter convert very well. Again a note to outbound marketers: don’t miss out. Affiliate marketing encourages sites to be more considerate of their users. A very good thing. More in Bash’s post on TechCrunch.
Jof Arnold, Gymfu.com, gave an insider’s view of developing apps for the iPhone and marketing via the iStore. It isn’t as pretty as it looks, with multiple platforms to develop for and the intricacies of the Apple approval process. People are already gaming the system, and there are lots of pirate installs on iPhones. The peak revenues mean that it is still too small a market to really interest VCs. Self-funding and Angels are the way to go here.
Leisa Reichelt, Disambiguity, spoke about user experience. She’s been a long-time favourite blogger for me. Her key points apply to all marketing, not just to user experience:
- Step 1: Pick an audience.There is no such thing as “the general public”.
- Step 2: Know your audience. Don’t assume, and beware of stereotypes. Find them. Watch them. Talk to them.
- Step 3: Design for your audeince. e.g. use customer personas. Having some ‘pretend’ customer identities, based on what you learnt in step 2, is a great psychological hack to shape and improve your thinking. Question every product and design decision against your users’ needs. Hire a (good) designer to make you a style guide.
- Step 4 Think big and think small. Simple things like moving a button can make multi-million dollar differences. Likewise, don’t loose site of the ‘big stuff’ either.
The panel on getting more women involved in tech start ups has been amply covered almost everywhere. I started using computers in the 70′s. Things are better now, but we still aren’t there. Sophie Cox, of Worldeka, made some good points about the sexualisation of youth culture. In the UK we have an issue with getting people involved in tech, regardless of gender. I find the falling numbers on science courses alarming. Paul Walsh didn’t make the panel, so he was replaced by a banana in a bin. No, I have no idea. Anyway… A future topic for a blog post.
- More cash doesn’t mean more customers. It is how you use it.
- Can you afford success? If your costs are ahead of revenues, do some creative thinking
- Boot strap cash - cash flow beats money.
- Choose your partners well to manage your cash flow.
- Look for performance based spend.
- Think about your burn rate. How much cash you are consuming each month controls your future.
- Pick the metrics that matter, and manage tightly against them – if your key metrics slide has 50 things on it, you need to re-think it!.
Lesley Eccles, Co-founder of Hubdub shared their experiences of launching, and tackling the US market from the UK. Think: lots of flying, careful with the humour, and find good local partners. Ian Hogarth, Songkick.com, stated the importance of focus well:
Focus is working out what your start up is best at, describing it accurately, and nailing that thing.
As a VC once said to me: focus like a laser beam. Dissipation of effort will rip success out of your hands. Ian pointed to a good wiki with a list of free/opensource tools for start ups: startuptools.pbwiki.com. He also made a point, as did Mike Butcher, that networking with other start ups is key. This is something the valley does well – sharing experience, supporting other companies. We are social here in Europe, but don’t seem to be as good at leveraging other people’s experience.
Nick Halstead, Favorit, talked on Funding and how to handle Angels should be compulsory reading for anyone looking to get funding that way. Angels are hard to spot – they don’t advertise themselves – for very good reasons – and they can be both difficult and rewarding to work with. There are angels that have fins rather than wings, you have been warned. Likewise, Fred Destin, Atlas Venture, gave some solid advice on dealing with VCs. Key take away: You need to build a relationship and credibility. Dropping a business card isn’t going to get you anywhere.
I’d agree with Alan Patrick’s take on the event. I see encouraging signs of greater maturity and experience in the UK’s tech startup scene, and that is a very good thing. It would be nice to think that in the next few years we’ll see some successful exits, which will free up cash and experience for the next, even bigger and better, wave of UK-based start ups.
Next up… Feedback on the start up pitches, and tips on pitching.