According to many sources, a staggering 90% of startups fail. You might be that lucky small small majority that thinks of an idea, executes it and it booms, but the majority don't work out like that; so where does that leave the rest of us?
At DesignMyNight.com, 5 years in, we are part of that lucky 10% that have survived and are thriving in this great London startup boom-era. It has been the toughest 5 years you could imagine but I have learnt 3 key lessons that have been vital to get the company to where we are today.
1) Be ready to pivot
The one fundamental attitude you need in a startup is being willing to pivot. In some instances, a company pivot can be a dramatic shift in business strategy however it doesn't have to be as dramatic, and could simply include an extra revenue model for example.
The market you operate in, customer's needs and technology is constantly evolving. If you sit still as a company you will risk getting left behind or even worse, another company swooping in and stealing your mantel.
At DesignMyNight we have pivoted from an advertising model, to a booking referral model to a B2B software provider (Boooking software & Ticketing Software). This has allowed us to not only add very lucrative revenue streams but also makes us more integrated with the industry as we are powering their operations as well as promoting their venues on our consumer sites. As we started to operate in this market we saw these opportunities and decided to act fast and pivot to take advantage.
Andrew & Nick, DesignMyNight co-founders
2) Cashflow is king
It's a common adage but couldn't be more true. I am a firm believer that you should always try and balance the books, ensure cash is in the bank and fight towards break even/profit. I have never looked to run a company that takes on millions with unrealistically high valuations, backed by hype rather than the figures. Boom or bust is a very dangerous game to play. At DesignMyNight we have always run our business in a frugal manner, making sure that costs are kept to forecast and turnover more than covers this.
If you have a solid, viable business turning a profit, this is when you should look to turn the rocket boosters on, perhaps with more investment, to then take the business onto the next level, knowing that X% more customers should result in X% more turnover.
You have the responsibility to your investors and your team that there is always enough cash in the bank to keep the company afloat. Our business pivots were actually fundamental to this as we moved to a software model that is direct debit cash up front for a guaranteed contract period. This shift actually resulted in us winning the Guardian Small Business Award for Cashflow earlier this year.
Graffiti wall of the Guardian Small Business Award Winners
3) It's a team sport
Picking your team is fundamental to the growth of your company. Not only picking the right people to truly invest in your company, but also trusting them to then delegate responsibility. You cannot do everything as a founder, and you probably don't have the skills to do everything either!
Soon after investment we ploughed that money into staff resources who run their own departments and report back into myself and my co-founder. Not only does this give them ownership of the company and a feeling of independence (the reason for joining a startup) but it also frees up our time to focus on strategy and company growth rather than the day-to-day.
We are super lucky at DesignMyNight and have a layer of senior team members who have all been with us for 2 years+ who know the company's values better than I do now! We hire on personality rather than CV and this has stood us in really good stead; it's not always about a degree rather a willingness to learn, get involved and be a team player.
There are hundreds of "keys" to growing a startup but I really feel these 3 points have been crucial to grow to where we are today. Oh and a heap of luck at the right times too!