This is a guest post by Ben Keene. You can find out more about Ben here.
1 in 3 people want to start a business, but only 1 in 10 take the leap.
Turning an exciting idea into a real world business isn’t easy.
But with an array of cheap online tools and a growing community in cities like London, it is increasingly possible to at least test whether your idea has potential without risking it all.
We spoke to 3 startup founders we admire about how they turned an idea in their heads into an actual business.
- Ruth Anslow,the co-founder of a different kind of supermarket, Hisbe
- Hugh Thomas is the co-founder of sugar-free fruit-infused sparkling water, Ugly Drinks
- Matt Robinson is the co-founder of subscription payment tool, GoCardless
1. What were your biggest motivations to start?
Matt: It was just something I had to do. Same when I stepped back from GC, I could have done lots of fun, rewarding things but I didn’t really have a choice. I think that you should only really start companies when you can’t not start a company. That said you should also make sure your goals (as far as you understand them) align with what you’re doing e.g., if you’re doing this to get rich you’re probably making a mistake.
Ruth: I was fed up with my big corporate job, feeling it was unfulfilling and meaningless. I needed to create something with true value and purpose. I needed to create freedom in my life because the job was taking too much from me.
Hugh: Independence…never enjoyed having a manager…love being in control of my own destiny
2. How have you looked after yourself on this journey?
Ruth: Ha! Great question…. because I pour myself into my work and grew up through work with a “work hard play hard” mantra, I found I had completely neglected my health. I have had to learn to put my health and happiness first, not just for myself but for my biz. Nowadays I pursue freedom, purpose, health and happiness in equal measure.
Matt: Professionally the best thing you can do is get a proper co-founder, it really halves the burden, but you need to be equals for that to be true. In terms of personal life I’m terrible — I get so absorbed in what I’m doing that I don’t go out, sleep, eat or exercise enough. I have to periodically fix this.
Hugh: I probably went too hard initially…but felt it catching up with me after 6–8 months…since then, I’ve started saying ‘no’ more…drinking in the week less and exercising daily. I’ve started really considering how I fuel myself too and nutrition is important. Mentally — it’s always a struggle and there are good days and bad days…getting used to that helps.
Ugly Boys: Hugh & Joe
3. How did you get the idea?
Ruth: My sister Amy and I got fed up with the way big supermarkets do business and decided they needed reinventing for the 21st century. We were motivated by the need to create something good and transformative in the world and to tackle the big injustices in the UK food industry. We figured if we could redefine and reinvent supermarkets on a large scale, then we could transform the way for is retailed forever. The name came from conversations with my sister, who was working had set up a coffee business, selling high quality direct-trade coffee. It was just coffee, “how it should be.”
Matt: We actually got this entirely wrong. I was more in love with the idea of starting a company than that company. As a result instead of starting with a burning pain, we spent ages in a room trying to brainstorm a ‘good idea’. The best ideas come from burning pains and the best ways to find those are either to solve one of your own or talk to as many people as possible.
Hugh: Partly inspiration…partly market analysis. We spotted an opportunity for a sugar and sweetener free beverage…this was based on previous experience in industry…reviewing US market…the full concept was our own inspiration based on this.
4. How did you manage your transition from a job to running a business?
Ruth: I had saved up a lot of money, which funded us for two years. When the money ran out I took consultancy work to keep us going.
Matt: You need to give yourself a proper run at things — for me this is at least 12 months full-time. We built up enough savings from previous jobs and consulting to last for 6 months and got lucky that we got on to YC within 3 months. If it hadn’t been for that we would have been in trouble and never made it as far as we have.
Hugh: We worked on Ugly for 18 months before leaving Vita Coco. Only when we felt we had everything in place did we pull the trigger.
Hisbe: The future of local shopping exists in Brighton
5. How did you go about working out what your potential customers really wanted?
Ruth: We did a lot of research into what customers want and lack from supermarkets. These kind of insights are well published in the industry. We could see that ethical consumerism was a key growing trend for the future. We also did a transactions report for the local area of our pilot store, which showed the make-up of our target customers.
Matt: Badly. We did surveys and other light touch things instead of having deeper conversations. We also didn’t listen to the feedback: a yes means maybe and maybe means no. You need people to be genuinely excited about you solving this problem, if they’re not then it will never take off.
Hugh: Being in-store is the best way to meet consumers. Nothing beats sampling them and telling the story. For customers (stores) there was a lot of pre-work involved, it’s again, all about telling the story and showing how you add value.
6. What was your first business model?
Ruth: We knew we needed to hit £80k sales per month, in order to make the number work for our pilot store in that location. We did a very detailed business plan and put a lot of work into the numbers, because it’s such a crucial part of making a food retail store work. We figured we could make it work because we just needed to capture 1% of the local spend on food/drink in our catchment area.
Matt: Do lots of payments. Charge small transaction fee on every one. This is one that stayed the same!
Hugh: Initial business model…start with bottled drinks..scale it out…year 1 — £250k, year 2 — £500k, year 3 — £1m revenue…scale from there.
7. What was the first version of your business?
Ruth: It all started with a blog… we used our blog and social media to create a rallying cry for a new kind of supermarket. We built a crowd of hundreds of supporters who helped us launch the store and raise the money.
Matt: We built a collection tool for clubs and societies called Groupay. It took 3 weeks to build and 8 months to realise people didn’t actually want it. We would have been better spending 3 months making sure we were building something of value. That’s what I did this time and I feel like we’re skipping the first 2 years.
Hugh: We had made samples at a factory and shelf life tested these…ultimately our MVP process didn’t go to plan and we had an expensive and time consuming pivot process..learnt a lot from this
8. How did you get your first 1000 ‘fans’?
Matt: Personal network; Cold calling; Tech press.
Hugh: Social media…in-store sampling…using friends & family!
9. How did you get your first sales?
Ruth: Our first day of trading, just before the doors open. We sold some mushrooms to a friend who runs burger bar!
Matt: Through a partnership. 9 months. (NB. Our first product was free, we released our paid version after 9 months.)
Hugh: In terms of stores…there was a good 6 months of conversations in the lead up to this…in-store, consumers started buying it as soon as it was on shelves and we were in-store sampling.
10. How did you build on this?
Matt: We got on to YC after a few months which gave us c.$150k. We raised our first proper round after 9 months ($1.5m). This was off the back of having a bank deal and regulation that no-one else had managed to do and striking some initial partnerships.
Hugh: It’s all about doing the hard yards in-store…ultimately…you don’t want a shelf warmer (something that sits on shelf) so getting the listing is only 10% of the work.
11. Looking back, what was the biggest thing you should have focused on in year one?
Ruth: Getting the store running as efficiently and profitable as possible was our aim and it was the right one. Looking back, we could have got more support on some areas but were a bit scared to spend extra money on extra resource.
Matt: Proving that the thing we wanted to solve was a burning pain. The only way to do this is by speaking to lots of customers.
Hugh: Getting a better understanding of the numbers…
This post was first published on Ben’s website.