Building and growing a startup is tough. Underneath all the Unicorns are hundreds of companies battling for investment. The growth of Slack or WhatsApp is record breaking. It challenges founders everywhere to hustle for traction. Read the endless articles on beautiful UX design. And remember the struggles to achieve product/ market fit.
Maybe that’s why entrepreneurs often ask for more help. But the best source of help is within. Startups are the best source of innovation in business and technology. Teams also advocate powerful values. Openness, sharing and learning are at the core of the startup dream. Innovation and values lay the foundations for amazing communities.
EIE15 - Scotland's Premier Startup Event
Here in Scotland we had the premier event for our startup community this week. EIE 15 brought together a bunch of amazing companies. The largest gathering of investors we see all year. And every advisor and supporter in the ecosystem. From inspirational speeches to 1 minute pitches with a heady brew of networking. Its an awesome day.
Community Makes the Difference
Anyone can see that it is impossible to recreate Silicon Valley in a 1,000 cities. Hero entrepreneurs and multi billion dollar funding rounds are beyond most places. But we all have the potential to build a great community. I love following and celebrating startup communities. Some of the best ideas and the biggest changes are rooted in community efforts. For example the startup community in South Africa is tackling the problem of xenophobia @iafrikan. Or explore the incredible startup world of Trondheim in Norway @arcticstartup.
Community brings startups three things. Working together means resources, experience and connections get shared. Everyone grows faster as a result. Openness allows small teams to build on the efforts of others. Testing products, linking APIs and tackling markets. Connected ecosystems offer support and encouragement. Just knowing that others have been through the fire and lived makes a difference.
Small Business Consulting to Help Build and Grow
We Can All Be Part of Something Great
“Its not a zero sum game” is a favourite mantra. This is what it means.
How often do you hear that a startup is going to change the world? Communities of startups will change the world. Groups not individuals will be the mechanism. The future of work will be self employed, networked and varied. Fewer and fewer people will work in a corporation or for a government. The skills we learn in our twenties will need to evolve or transform. Everyone will have 4, 5 or 6 “careers”. Communities will support and celebrate this lifestyle.
Work will be for a lifetime. The idea of retirement will become outmoded. Each individual will choose to vary the pace and intensity of work. Adapting to life circumstances along the way. It has to be this way. Demographics and economics will not support the current model. Technology is busy breaking it up.
Not every startup community will be the home of billionaires and unicorns. The vast majority will consist of hard working people, co-operating and succeeding. Having fun and living life well. We all have the chance to be part of something great.
EIE15 reminded me that we have many of the elements in place here in Scotland. Structural basics include great universities and a supportive Government. Two incredible companies have reached “unicorn” status. Skyscanner and Fanduel - check them out. The exhibition hall was full of great entrepreneurs aspiring to join them.
More huge successes would be welcome. Our urgent need is to build a strong community of mid size growing businesses. Too many startups are caught in a trap of small. The billion dollar blowouts are great . We must back them with hundred or more in the $10-100million range. There are lots of companies with the potential. I could list 20 without thinking. The challenge is to make the step from early stage traction to established business easier.
The community also needs a voice. We connect through big events like EIE15. A host of meetups and other small scale events are also available. Open Tech Calendar lists 68 right now. On a daily basis hubs like Codebase, Entrepreneurial Spark and Rookieoven (my favourite) are home to buzzing groups of founders. Someone needs to bring these stories together and tell them to the wider world.
This week reminds me to keep helping startups grow and develop. My small business consulting is all about this focus. This is a community effort. It is about answering questions not a defined formula. If you want to join those discussions subscribe below.
Tuesday 28 April was the third gathering of a group of SaaS companies in Scotland. I am lucky enough to facilitate the discussion. It is some of the most fun I have. This time round we concentrated in customer acquisition. You can see some of the ideas shared in more detail here. Follow this link to find a list of all the great companies that participate.
The main topic was the benefits of Inbound v Outbound approaches. I also posted on Medium about some of the thoughts stimulated:
The Best Way to Grow the SaaS Revenue Model?
Openness and sharing
Whatever tactics you favour, SaaS growth is not an easy nut to crack. One thing we can do is help each other get there. There is a already a great spirit of openness and sharing when the group gets together. I also love the eMail Alan Bonner sent after the event. Some great ideas. I have shared the full text on the Ideas page.
Ways of sharing
I have a couple of other ideas which might help things along….
There is very little data available on the SaaS marketplace. I have made a start on building something for Scotland. Have a look at my SaaS Scotland page for a collection of 192 Scottish SaaS companies. I would love to add to this database if you know of others that I have missed. I will also look to add more than just basic data in due course.
We already have a LinkedIn Group for SaaS. I have now switched this to be an open group. Feel free to join in. I will be honest and say that I am not convinced by LinkedIn as a way of sharing and engaging. So I have also set up a Slack channel. Drop me a line if you would like to contribute.
How do you picture the sales engine for your business? I facilitated a workshop on conversion for 9 SaaS companies this week. We had a great discussion and there was no shortage of great ideas from the entrepreneurs. Everyone recognises that revenue generation is an end to end process but there is a wide range of different ways of imagining how it works. Images are incredibly powerful and sharing the strengths and weaknesses of different visuals is a fascinating way of illuminating some important messages.
How do you imagine your sales process?
Is it a funnel or is it a sieve?
The sales funnel in various forms is probably the most common metaphor. I have always had an instinctive problem with this image and here’s why. In the real world everything that goes into a funnel comes out the other end. We all know that this is not how the sales pipeline works for any business. The usual funnel graphic also encourages a pretty blunt, law of large numbers approach. Pour enough website visitors or twitter followers in the top and you will make enough money it seems to say but this only works if your product and service are good enough. Sheer volume is not enough.
Finally, a funnel is often presented as a closed system. Potential customers are influenced as much by the events of their own lives and the actions of the competition as they are by your efforts to engage their attention. This gives rise to an image which is more like a leaky funnel or as someone described it a sieve.
I prefer to think of the process of attracting, engaging with and selling to new customers as a series of stepping stones. Each stone is different in shape and size and the pattern is scattered so that different customers adopt different paths through the process. Of course, if someone misses a stone or slips off they are swept away and we lose them from the process.
This conveys some of the complexity but it still implies a linear journey. Winning and keeping customers is more like a continuous cycle. The environment, the competition and user expectations change all the time. No matter how successful your business is you will always be learning and improving the conversion process. Every time you win a paying customer you will be trying to upset to grow revenues from that customer. All the while you are winning new customers, you also need to make sure your product and support are delivering the service that delights your existing customers and prevents churn.
Measuring = Listening
Just in case this was beginning to sound too easy, you also need to remember that customer take different paths. Ideally you would be able to curate a unique journey for every customer. In practice, this is still too challenging but the best companies are able to identify patterns and manage different groups of customers differently. Good use of analytics to identify behaviour trends and build customer profiles, for example by industry or by customer size, can give a well tailored experience.
Analytics is a whole other topic but one observation here. You can measure everything but it is very important not to use measures as goals or benchmarks. With analytics, measurement is listening. Allow the numbers to speak to you and you will be half way there.
Finding order in chaos
“Chaos: When the present determines the future but the approximate present does not determine the approximate future."
I was lucky enough to be with some great companies at the workshop and I make no apologies for listing them below. My learning was that it was possible to develop order in the chaotic system of SaaS sales and service. Success is a combination of precise targeted actions, listening to customers at every stage and some imagination to bring your image of the customer to life.
If you are interested in taking the conversation further or setting up a SaaS Conversion Workshop, please get in touch.
My thanks to the great companies that made this one possible: Appointedd, Float, MakeitSocial, GetSpoonfed, SpecifiedBy, My1Login, LogicalWare, Cojengo, Marketry.
Too old for an all nighter....
Like many people, I spent Thursday night/ Friday morning in front of the TV transfixed by the unfolding drama of the referendum results. I shared most of the night with my 19 year old son who voted the opposite way to me but was equally fascinated by the outcome (I voted No by the way just in the interests of full disclosure). Long before the outcome became clear, one truth was universal. This campaign engaged more people in Scotland than any other political event in our lifetime anywhere. I was lucky enough to be living in South Africa in 1994 when the first free elections took place there and even then the level of actual voting was less than we experienced on Thursday.
In a world where democratic participation is in retreat across the world and people of all ages and views are consistently disgusted and despairing about their political systems, Scotland dramatically bucked the trend. Everyone would like to see this continue but it won’t happen unless we do something about it.
We all know one reason the referendum was different - because independence was a clear cut, once in a generation issue. Incidentally, the decision to have a simple Yes/No made a big difference. A three option question would have undermined much of the campaign. This situation will not hold for long. We can already see in the squabbling about potential new powers and different options for devolution that politics as usual is starting to take hold.
On both sides it also harnessed a larger trend. Voters no longer engage with political parties and politicians. Overarching ideas which provide a frame of reference for everything are considered cranky at best and dangerous by many. People engage with specific issues. Passionately. Often these are issues which concern everyday life but just as frequently care for others is the dominant motivation. Think about the bring back our girls campaign a couple of months ago for instance.
People also want to see things actively being done about these issues. Passing a new law or making a distant donation does not cut it. This is the new war. We don’t want to go abroad to fight but on the right issue we are all missionaries now.
Party programmes with compromise and balance and carefully calibrated appeal to the widest possible audience engage almost no-one and win no votes. Look at the pattern in the referendum where many traditional Labour areas voted Yes and constituencies which have regularly elected the SNP voted No. I don’t believe that any political party will be able to capture the active participation triggered by the campaign.
How can technology help?
In Scotland, I expect we will capture the excitement and passion of the campaign by seeing a series of groups emerge which aim to tackle issues which engage them on a very personal level. These groups will all look different but they will have a couple of things in common. They will not be aligned to any party. They will publicise and build their campaign by unconventional methods. They will take direct action to fix the problem not just to protest and not just as pressure groups.
Obviously mobile and social media will be key enablers for these groups. I would like to suggest something more.
For many of the areas which most concern people - health, education, poverty, democracy and so on - technology can be a fundamental part of the solution. Broadly this will take two forms. Helping deliver public services more efficiently and with better access is the easy and obvious although making such reforms happen is considerably more difficult. Many will bypass this route and aim to empower communities to take ownership of the issues which are most important to them and shape solutions specifically for their community.
Let's do something!
Here is my proposal. We should set up a Scottish Startup Community Foundation which will provide skills and ideas which can help communities take advantage of this opportunity.
The model would be the foundations in US communities such as Boulder (Entrepreneurs Foundation of Colorado or EFCO) where Startups chip in pro bono skills and a small percentage of equity. As time passes the latter builds up into a solid base of assets. Other income is raised conventionally from donations.
I have not had the chance to discuss this with anyone. My plan now is to go off and turn this into a proper proposal but I would love to hear what people think.
Use the comment box or the take the two option poll - I would rather hear from two people who think I’m crazy than nothing!
Startups are a great learning environment
What a great first week back from holiday! Sun shining, lots of Startup activity and some great discussions. Too much to detail everything but I guess I have one key takeaway from the week. Learn, learn, learn. One of the best things about getting involved in the Startup scene in Scotland has been the chance to spend time with people who are brimming with ideas, full of passion and very talented. As a result I am always learning, always being exposed to new ways of doing things and constantly being challenged by fresh perspectives.
Two prime examples this week, both on Wednesday as it happens. I spent the afternoon with two companies, Mallzee and Appointedd. Both have ambitious and exciting plans for growth over the next few months. I had two separate meetings covering the business strategies, the opportunities and plans for a whole range of activities to make things happen. Look out for plenty of good news from both sources in the weeks ahead.
In the evening, I attended the first 9Others dinner to be held in Edinburgh, arriving late because I was so engrossed in my earlier discussions. 9Others is a network of entrepreneurs started in London in 2011. The idea is simple, to bring a group together for an informal dinner and give everyone the chance to meet each other and share a personal challenge. The group then shares ideas about responding to that challenge and hopefully each person learns something from the evening.
I can certainly vouch for the effectiveness of the format last week. It was a great opportunity to meet a bunch of people I didn’t know (I had only met one of the attendees before) and the variety of challenges and responses was highly stimulating. Thanks to Tadas Labudis for organising and looking forward to the next one.
All in all a great week and gave me so much to think about. A few other highlights from around Scotland;
Massive congratulations to Lee McGlaughlin and the team at IC Mobile Lab for winning the Glasgow 2014 Digital Sprint competition.Can’t wait to see those augmented reality graphics round the city - bet they look better than the haircut Lee was showing off on Wednesday!
Always good to remember these are real businesses as well. Brewdog held their AGM this week and in keeping with the brand, the video that goes with it is a cracker.
Love the new look of the 360 Strategy website…..
….and also the makeover that Appointedd have given their microsite product
I also think this Open Innovation Masterclass looks like an excellent opportunity for some budding entrepreneurs.
Don’t forget to check OpenTechCalendar for forthcoming events and meet ups
And finally, not exactly Startup but the PopUp Scotland show featuring the best of Scotland’s Art School graduate shows should be a top source of creative inspiration, running until 2 August.
While you were away.....
Sun, sea, some great reads, running in the heat, did I miss the Startup world? Well I did give it a lot of thought which will hopefully bear fruit in the coming months. I don't think I am alone in finding that my real question when I return from holiday is more practical. Not the existential did I miss it but what did I miss? I have been keeping track of Scottish Tech Startup people and events for a year now. Frequent meet ups, great events, open conversations and lots of coffees have fuelled this interest. Since none of these are available in Majorca, I have turned to Twitter to check out events in my absence. Using my own list and with thanks to Tadas Labudis @Labudis for his well curated list, here are the highlights of the last week or so:
Exciting news of a great collaboration between Desk Union and RBS to provide a new flexible workspace for entrepreneurs
Interesting slideshow from a talk by Nooq founder Graeme Bodys about transparency
Can't keep my investment company Mallzee out of the news either. They were named in top 20 fashion Startups by tech.eu and you can also vote for them as a fans favourite in the Great British Startup Cup - will Cally withdraw if Scotland votes Yes?
A more serious competition from BoS. Not long left to enter their enterprise awards - deadline is 23 July and valuable support is on offer for the winners
Also serious competition, great to see two strong Scottish Companies in this contest to win the right to supply John Lewis stores with their product
Not sure if I have the energy for the Wild Hearts WolfTrek event this year but it sounds great so maybe next year.....
.....and last but surely the most significant news apparently the team @floatapp is now big enough for a game of ultimate frisbee!
9Others is a fun dining format bringing together players in the Startup ecosystem. Tadas has also organised (and kindly invited me to) the first such event in Scotland on 16 July. Places still available....
Ambitious Startup We Are The Future is hosting its first event stateside with the World Entrepreneurship Summit in San Francisco on 26 July. Even more exciting six early stage Scottish Startups won an expenses paid trip to pitch at the event in a contest at RBS HQ
The next Dunning Communications Breakfast focused on the value of Brand Culture is on 7 August
Quite a few meetups and other get togethers still happening and Open Tech Calendar has a neat and easy summary of the next few events now on its homepage
A few very significant external announcements I could have missed without the Twitter as well. First and foremost, the arrival of Google Ventures in Europe with a $100 million fund is fantastic for the whole Startup ecosystem
More local but also great news, Glasgow has become the first city in Scotland to offer free public WiFi
Somewhat arcane but vital to all our futures the Scottish Government's strategic plan for collection and use of data across public services.
Pretty lively for the holiday season I must say. Please let me know about anything I have missed .
Thoughts and Observations from a year in the Scottish Startup scene
I have been enjoying the sunshine this week and looking forward to heading to Majorca for my hols next Saturday. This will also mark a year since I left my previous firm and started looking for Startups in Scotland. I still feel like a bit of a newcomer and there is a ton of great things happening across the ecosystem so it is hard to keep up. So I offer a few thoughts and conclusions very tentatively….
First and foremost, there is a fantastic level of energy, innovation and freshness. There are lots of great companies with inspiring founders, strong teams, viable ideas and the passion to make things happen. I have had so many good meetings with people that just demand to be heard and I have seen many of these businesses make great progress even in the short time I have been around. At recent events like EIE, Opportunity Knocks and the Scottish Edge Awards this message has been emphatically driven home by the quality of opportunities being pitched. I saw it again last week as a judge at the Scottish Digital Technology Awards. I have tended to focus on the tech companies, especially those with a mobile aspect but there are also great Startups in green energy, life sciences, manufacturing, services, health and many other sectors.
The seeds of a business renaissance have clearly been sown. The initial fertiliser to feed growth is also largely in place. Very early stage seed funding flows through universities and two very active business incubator schemes, ESpark and Codebase, which attract both public and private funding. There is also a thriving angel community with many active syndicates offering slightly different focus and a fair number of individuals also joining in. For amounts between £100,000 and £1 million plenty of options exist. These funds are supported from the public purse in two ways. The UK’s Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) offer generous tax incentive. Scottish Enterprise provides a range of grants and through the Scottish Investment Bank (SIB) matches monies raised by those angel syndicates which are co-investment partners.
What is needed to get from these early shoots to a flourishing ecosystem? Firstly, I think it needs to be one ecosystem. Glasgow, Edinburgh, Aberdeen and Dundee do not have the muscle or scale to be individual hubs. Scotland has its own identity, we can offer incredible lifestyle options in the Highlands and Islands as well as vibrant cities and great culture so lets operate as one Scottish hub. I know from personal experience that those already in the ecosystem are open, warm and welcoming so lets work together to grow. This might also allow us to harness the output of our world class universities more effectively, something that is only just beginning to happen right now.
We also need to harness the knowledge, experience and networks of the wider community. Angels are good at providing finance and there are some great mentors out there but nowhere near enough. It would be great if we could create a forum where the expertise and connections of the whole community could be accessed by Startups. Ideally, we should cast the net as wide as possible including both those in Scotland who are not currently involved, usually because they don’t have the resources to invest, and the global expat community of successful Scots.
The rest is harder. I was brought up to believe that Scots were people who went out into the world and punched above their weight. I am completely convinced that we have the talent and passion to do this again but we seem to have lost something. I have heard people talk about lack of money, shortage of ambition and so on but these are not quite right. Whatever happens on 18 September, we need to get our global mojo back and then everyone else watch out!
The Scottish EDGE Awards Round 4 Final
One of the stars of the Golden Age of Hollywood, the great Bette Davis, once said "to be given a chance to create, is the meat and potatoes of life. The money is the gravy.” The finals of round 4 of the Scottish Edge Awards which took place on Monday 16 June at RBS HQ in Gogarburn were a full day of excellent meat and potatoes followed by some well deserved gravy in the evening.
Scottish EDGE (Encouraging Dynamic Growth Entrepreneurs) is a competition to win up to £50,000 of funding to help businesses grow, create employment and export their products outside of Scotland. By finals day, over 200 entries have been whittled down to thirty through an exhaustive process of desktop review and panel interviews. The selected 30 pitch on the day and face challenging questions from a heavyweight panel of five business leaders. This is where the basic fare comes in. It is a pretty tiring day to be in the audience and must be exhausting for the judges.
This is the first time I have attended. The money and recognition are obviously important to all the businesses so they are well prepared and the quality of pitches was very high. Being the final group, the underlying businesses are also strong. To make it more difficult, the variety was quite extraordinary covering services, agriculture, manufacturing, food & drink, software, fashion to name but a few. Everyone who came on stage seemed to have a genuinely stand out and innovative idea. Comparing these different propositions must have been extremely tough. Keeping up a constant level of interest and energy for the whole process is even more important. I know from similar experiences that it is essential to give the same attention to the last pitch as to the first. The schedulers did their best by putting an especially high energy pitch last so maybe that helped!
This is the mince and tatties of the event. The ideas are inspiring and the people were brilliant. Thirty pitches in succession with forensic challenge on growth and investment plans still feels like a working day though. EDGE is not razzmatazz. It is a tribute to graft, focus and determination.
In the evening though 15 companies were awarded funding. The whole atmosphere was different. Blood and sweat was replaced with excitement and gratitude. Chris Van Der Kuyl, chairman of the judges, handed out the trophies and Gordon Merrylees of RBS reminded the audience why they were so deserving. It would be easy to get picky and mention other companies who deserved the money instead. A strong case could easily have been made for any of the companies that pitched and I’m sure the judges felt the same. Tough choices.
The gravy was also accompanied the next best thing to a glass of fizz. For the first time, there were also Young EDGE awards for businesses run by under 25s. This was part of a separate process but the winners were at the same ceremony and another great bundle of ideas and passion.
Scottish EDGE is a day for the entrepreneurs and their businesses. Being in the audience was very different from an event like Opportunity Knocks where entertaining the attendees is part of the script. In the end it repayed the time and attention. I learned about some great business and met some fantastic people. I also know it works. One of my investments Mallzee won an award in round 2 about a year ago and it was instrumental in helping them get into the market and move the business from startup to first round of Angel funding. The CEO Cally Russell gave a great talk about the benefits as part of the awards ceremony. EDGE does not just provide money. Recognition, advice from the panels at various stages and networks of willing helpers all contribute to the future success of those who enter. I am sure the £660,000 awarded this time round will make a huge difference too.
You can find out about all the Scottish EDGE finalists and award winners on the Scottish Enterprise website and if you have a growing business look out for round 5 which will open to entries in September.
Opportunity Knocks, Edinburgh 29 May 2014
I had expected to spend 29 May attending another “event”, hearing platitudes mouthed by some familiar faces and trying to extract some value from the networking scrum during the breaks. Instead, Opportunity Knocks turned out to be the most passionate, thought provoking and inspiring business conference in my memory.
I could write a long and not at all boring post expounding all the great ideas I heard and picking out the funny, frank and fantastic bits from the day’s presenters. But let me just concentrate on the handful of things that made this standout so much from the run of the mill.
Support and help was the ultimate message of the day. It is working together that allows us to rise above our individual limitations and achieve great things. I left with lots of ideas for mentoring and collaborating with startups running around my head. Please use the comment box below to share your own best ideas about how we can help each other and leverage the passion and commitment of the whole community.
By Kenny Fraser
What did I learn from EIE14?
EIE 14 took place in Edinburgh this week. Organised by Informatics Ventures it has quickly become the premier event for Startups and potential investors in Scotland and one of the most important in the UK. This was my first time attending and I must admit I was blown away by the scale and breadth of the whole event.
EIE stands for Engage, Invest, Exploit and despite the slightly creepy connotations of the last word, the concept works. The conference is focused in the Engage phase and is an opportunity for angels, VCS and other investors to meet with and hear from as many Startups as possible.
The whole day is centred around the Startups and this year they were organised into three main groups, Technology, Biosciences and Energy. Most of the main sessions were devoted to pitches from Startups with a separate room for each group so attendees could focus on the sector of most interest. Pitches in turn were split between one minute "pop up pitches" and longer 6 minute pitches which had a panel asking questions at the end. I would be interested to hear the feedback on these sessions. For me, the one minute version was great, gave me just enough to decide whether I wanted to go and seek out the company pitching and find out more. The longer versions were a bit staged and less helpful. This may just be me. Sitting listening to people talk from a stage has never been one of my strongpoints.
Luckily there was also plenty of opportunity to talk directly to the Startups. Companies from all three groups were gathered in one exhibition hall. There is no favouritism so everyone has a stand the same size and a huge throng of people just work their way round the room. I knew quite a few of the companies exhibiting and every time I went up to chat to someone I knew, they were engaged by at least one stranger trying to find out more. It was clearly working.
It is well worth checking out some of the pitches and other material on the website eie14.com. However, I always find with these events that it is the buzz and messaging around the room that sticks in the memory. So what did I learn from EIE14?
Look out for some serious marketing
Everything feels very optimistic and energetic. Although I focused on the Tech startups, there was an equal sense of urgency about the bioscience and energy stuff. On limited evidence, it would seem that this is indicative of the UK generally not just Edinburgh or Scotland. Just to reinforce this, the latest Tech Monitor from KPMG shows strong growth and especially the highest level of hiring in the sector for three years. The first part of the influx of funds is clearly being felt already.
I will be very interested to see the impact of the other part of the investment promise. One of my observations about the UK and especially Scottish startup sector has been lack of visibility in the wider public domain. My guess is that there will be a bunch of exciting and attention grabbing marketing from tech startups in the next 12-18 months. Hopefully, this will mark a big step forward for the startup ecosystem as a whole.
Kenny Fraser is the Director of Sunstone Communication and a personal investor in startups.