Posted: Fri 1st Sep 2023
If you're running an early-stage company, you're in such a unique position. But for a lot of people – and perhaps you too – it can be quite overwhelming. There's opportunity everywhere, nothing works as well as you want it to, and you've made so many mistakes it's hard to count. (You'll make loads more, don't worry!)
I noticed all of these things in the early stages of building Fanbytes – the influencer marketing agency I later sold in a multi-million-pound acquisition – and it almost killed the business.
We nearly ran out of money, our processes were disjointed, we made many hiring mistakes, and so on. But it all worked out and we learned a lot of lessons along the way.
To help founders like you navigate through these choppy waters, I've highlighted some critical pieces of advice for early-stage entrepreneurs below. Every single tip here would've been gold dust when I was building Fanbytes in the early stages, so I'm sure they can help you too.
Five tips for early-stage entrepreneurs
1. Only hire staff when you have documented and repeatable processes in place
Don't do it the moment you get too busy. When you've implemented proper processes, you can objectively measure an employee's performance and give them the best chance to succeed. It means you're not leaving people high and dry, figuring out the job as they do it.
Write down, as if you were explaining to a nine-year-old, step-by-step processes for exactly how you do the job for which you're hiring someone.
So, for example, you might detail how you run social media ads, or how you close clients. Put it all into a Word or Google document, as a clear checklist for your employee to follow.
2. Know how to raise money from investors
In total, we raised two million pounds for Fanbytes. Fundraising can be a tough journey but it doesn't have to be. I used the "Who, How, Where" method to raise money, and have recommended this approach to many other business founders.
Who: Who has already built an older version of my company?
These investors will understand your model immediately, making it much easier for you to raise from them. Plus, they can see themselves in you, which always increases your odds.
How: How do we make this a no-brainer?
Always fundraise from a position of strength not weakness. It's a no-brainer for an investor to fund a company that just had its record year. It's a risk to give finance to a company that doesn't even have a product.
Where: Where does this realistically go?
Be extremely clear and realistic about the exit plan. How are investors going to get their money back? Investors warm to founders who aren't deluded about their business's future direction.
3. Focus on a niche and expand – become the IBM of your customers' world
When you start your business, it can appear logical to try and serve everyone. The problem with that is that you don't become the preferred option for any segment of an audience.
The way you solve this is by focusing on a niche – and then niching again. For example, with Fanbytes, in our first year we focused solely on music labels. In our second year, we concentrated exclusively on mobile apps. Then in the third year, we added more lifestyle brands.
We did this because we wanted to be seen as the safe pair of hands for the market. If everyone in a small market knows you, automatically you become the preferred option.
There's a phrase, "Nobody got fired for picking IBM", and the idea behind it is simple. The biggest factor in someone deciding to buy (or not buy) something is making the incorrect decision. But if you're buying a new software tool, IBM is such a safe option that you can't go wrong.
As you start and scale your business, by rigorously focusing on a niche, you become the IBM of your niche. That's because everyone knows you, or knows someone who's worked with you. And as long as you're delivering a great experience for them, you'll be seen as the safe option.
4. Obsess over your current customers
Here's something I learned the hard way at Fanbytes. Once you hit some level of growth, obsess over your current customers rather than constantly searching for new ones.
I love marketing and sales, and I love the hunt for the next deal. But at some point, as you scale, most of your growth will come through selling more to your existing customers rather than getting new ones.
This is very counterintuitive to us as entrepreneurs – we love getting deals over the line and convincing virtual strangers to come over to our way of thinking.
Eventually when you come to sell your product, one of the biggest factors will be how many times your current customers spend with you. The higher that number, the greater the certainty you give to a potential buyer of your company.
5. Understand that any problem will pass
I was quite an emotional entrepreneur when I started out. I would react to any problem because any big issue looked like it could 'destroy' the company. But here's the truth: Everything bad that can possibly happen will happen, and that's just part of the game.
Customers will go elsewhere, your best employee will leave to work for a competitor, an investor will pull out at the last minute – this is completely normal.
As an entrepreneur, you're in the business of solving problems, whether they're people problems, process problems or anything in between. That's what you're paid for. If it was easy, everyone would be doing it. Adopt a "This too shall pass" mentality and just roll with the punches.
The Enterprise Nation Fund
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