Entrepreneurs must show an appetite for risk
Fresh from a weekend of filming for Dragon’s Den, to appear on BBC2 this September, I have been reflecting on the entrepreneurs who were pitching, and what it is that makes them backable.
I’m looking for the killer instinct. I saw a lot of passion, enthusiasm and even drive this past weekend, but the difference between an entrepreneur that I really want to back and one that gets away is steel in the eye. I want someone who is going to be unreasonable about success, not someone who will accept defeat.
I see a lot of entrepreneurs who think small. That’s different from having a reasonable set of forecasts and an achievable set of goals.
If you ever catch yourself thinking small as an entreprenuer, you have to step back and remind yourself of why you got into those 80-hour weeks in the first place – it was solving a big problem that you believed only you could solve.
Successful entrepreneurs tend to be schizophrenic. One must think big, but start small, and move fast. That involves thinking through the milestones that you will achieve and how you intend to get there. One must demonstrate confidence yet remain humble for those mistakes you will make, and for what you don’t know yet.
TAKING THE BIG RISKS
I always ask people I’m considering backing what the biggest risk they’ve ever taken is. The level of risk one takes is tied to the level of ambition that one has. No risk means no real ambition. No real ambition means they represent a poor bet for me to make money out of backing them.
GETTING TO MARKET
The way that a product or market enters the market is called its “go to market strategy”. Typically what you are trying to do here is create a chain reaction. If a certain customer or type of customer adopts your product, they act as a referee for others who may be hesitating. Finding those early adopters is everything in a new business.
Businesses where sales are made one at a time must achieve scale through volume and reputation, leading to premium pricing or large sales forces. But the internet, distribution deals and strategic partnerships can help a business achieve scale sooner.
The key thing to remember when planning your “go to market” is to control as many of the variables as possible.
If you are going to sell something through major telcoms companies, you will not succeed unless you prove market demand elsewhere with private customers first.
You can’t control a telecoms firm, but chances are you can find individuals who will adopt your product.
Good luck and remember that fortune favours the brave.
Julie Meyer is CEO of Ariadne Capital.