Our CEO and co-founder Martin Kelly shares his own experiences on how to get past a financial meltdown and thrive on Real Business.
After spending months on a business plan we pretty much lost any chance of investment due to the 2008 financial meltdown. However, seven years on we’re a thriving business, so what were the most important things I learnt which could help you.
I've cited one from each of the first five years of our business and, to be honest, these pretty much ring true regardless of the wider economic environment but they certainly take on heightened importance in financially restricted times.
Year one: Be prepared to pivot
Changing your proposition can be one of the hardest things any entrepreneur can do, it’s like acknowledging there’s a problem with your child.
But it’s crucial you’re prepared to change the entire nature of your product or service as the process evolves – particularly in technology.
Don’t be afraid to try a few different things to get a feel for what it is people will want, the market will tell you what your honed up product ultimately ends up looking like.
It’s extremely rare your proposition is right and fully formed straight from the beginning – our business is nothing like the one we set out with.
Our core offering today – programmatic ad technology – accounted for just 40 per cent of our revenues on the very day we resigned all clients representing the other 60 per cent, so we could focus solely on this.
It was a massive call – I still remember my wife’s reaction – but it was unquestionably the right one.
Turnover was pretty healthy in that first year (about £130,000).
Year two: Network – like crazy
I can’t underestimate the importance of just getting out there, meeting people. We spent loads of time on this, countless hours in coffee shops, not knowing if anything would come out of it or even why we might be meeting them. However, you genuinely never know what might come of it in the future.
Our first client was someone I met by chance in a reception room whilst waiting for a meeting. One of our biggest clients, Netflix, simply came through an introduction of someone I’d met randomly.
At the end of year two, revenues hit £850,000.
Year three: Kissing the elbow
I can’t take credit for the phrase but it’s a good one. Although we had to boot-strap the business from the ground up and started with 18 months of no salary, I consider us quite lucky in the sense we became profitable pretty quickly, which is rare.
However, if you want to get really big, it's all about getting the timing right - particularly when it comes to investment or funding. It's that moment when you've genuinely got traction with your product – you've got enough profitable customers and you're finding it increasingly easy to get in front of them.
The hockey stick growth curve is well known and the transition point is the elbow, going from some growth to really steep growth. The first challenge is to recognise when this point is and the second is to have the courage to just embrace it – “kissing the elbow.”
Year three revenues hit £2.5m with eight staff.
Year four: Scale. Scale. Scale.
This leads on from the previous point and is about doing everything you can to grow and scale the business. Initially every person we hired was in the frontline in terms of revenue – sales and account managers, people whose work most directly impacts the £s coming in.
I think we got to about 20 people by the end of year four (and nearly £6.5m in revenue) this way before we realised it isn’t the best way to scale a business. We pretty much ignored the operations and ‘internal’ functions such as HR which are absolutely necessary to create the right structure and process so a business can keep on growing.
You too must realise that there comes a point where the business is no longer about the founders but about the thing you’ve created which should be able to function without you.
Year five: Keep reaching
I’ll simply use an anecdote for this one, you’ll get the point.
Years ago, a Microsoft contact gave me an extremely expensive bottle of port to open when a special landmark was reached. At first I decided this would be our first client but then decided it would be £100,000 turnover, then £1m, £10m…
Today, revenues are in the tens of millions, we’ve got 70 staff and a host of awards and accolades.
The bottle remains unopened.
